Orders of the Day

Hon. M. Farnworth: I call committee stage Bill 7, Tenancy Statutes Amendment Act, 2021.

Committee of the Whole House

BILL 7 — TENANCY STATUTES
AMENDMENT ACT, 2021

The House in Committee of the Whole on Bill 7; S. Chandra Herbert in the chair.

The committee met at 2:25 p.m.

On clause 1.

Hon. D. Eby: We will be entering into committee stage this afternoon. I look forward to hearing the members’ questions as we move forward, and I’ll introduce staff shortly.

B. Stewart: It is a pleasure and an honour to stand before this House and raise important questions about how Bill 7 and its implementation will affect British Columbians, renters, as well as people that are going to be impacted — the landlords or people that own buildings that are part of the rental pool in British Columbia.

I just want to thank the staff that have supported me: Ryan Mitton and Abigail Uher, who are working in both communications and research for me. But more importantly, the staff that the minister provided after this bill was introduced on March 1: Cheryl May, Tyann Blewett and Kathy Elder. It was good to have their insight and expertise.

After reading the contents of the bill and the implications, we do have questions. I guess the first and one of the most important, especially based on the actions of the government that we’ve seen in the last year, is this legislation. We’re wondering if it’s compliant with UNDRIP, as it’s one of the things that government has stated that the lens of UNDRIP is going to be focused in. I first would like to find out if it has, and if that has, what provisions are taken and where that might be in the act.

Hon. D. Eby: I can advise the member that the proposed amendments are consistent with UNDRIP, and the province has engaged with Indigenous groups in a manner that supports the province’s commitment under section 3 of the declaration act to consult and cooperate with Indigenous peoples in B.C. regarding legislative amendments to ensure they’re consistent with UNDRIP.

B. Stewart: I guess we’ll get, maybe, a little bit further. I do wonder if this act is going to have any oversight over rentals that are on First Nation lands. In terms of British Columbia, in my particular riding, there are almost 10,000 non-band members that live on band land. Many of those are rentals or on 99-year leases. Is that part of Bill 7?

[2:30 p.m.]

Hon. D. Eby: The amendments would not apply on reserve land. They do apply on treaty settlement lands, unless the nation has passed its own residential tenancy rules. To the best of staff’s knowledge, only one nation has done that, Tla’amin Nation. Otherwise, it does not apply on reserve land.

B. Stewart: We’ve talked about the assessment, in terms of the lens, from the UNDRIP lens. What about an economic impact assessment for this piece of legislation. Has there been an economic assessment done, and if so, what were the results and the impact assessment?

Hon. D. Eby: As part of the request-for-legislation process, there is an economic review that is done by staff. There was a determination of economic impact on two groups — specifically, landlords and tenants. In particular on tenants, there is a significant economic impact as a result of the pandemic. On landlords, there are some impacts of measures in this bill, but in general, the position of the government is — and the position of the task force was, in the recommendations — that these were balanced impacts between tenants and landlords.

B. Stewart: I have difficulty in imagining…. When I read the legislation, the legislation does really reflect the work that the rental task force did, in the recommendations. What I think is the economic impact…. Considering outside of COVID, I think of just the ability for the group, the landlord community, being able to not only do the work, maintain the stock in British Columbia at a level and a standard that is what we would expect and what the RTB would expect…. But the question really is that it’s highly punitive, and it has a lot of language in it that makes the accountability on the landlord community.

I guess, really, the appearance in Bill 7 is that there’s a significant weighting in economic impact on that community. This legislation deals with the renters’ side of it and the rules, with the RTB, about the landlord-renter relationship. But the question really is: how is this going to improve the supply, with these kinds of punitive actions, in terms of how landlords are going to be incentivized to develop more or maintain the stock? Where is that economic impact in terms of this? Or was it ignored? Or is it not relevant?

Hon. D. Eby: Obviously, I’m going to have to disagree with the member’s characterization of the bill. It’s fundamentally incorrect, but he doesn’t have to take my word for it. I’ll read the words of David Hutniak, chief executive officer of LandlordBC:

“The Rental Housing Task Force recommendations are a road map for positive change. LandlordBC believes that encouraging continued investment to prolong or sustain the useful life of a rental unit or building is essential. We further believe that making the landlord proceed in this proposed manner, whereby legitimate cases where vacant possession is necessary and appropriate are adjudicated up front, will ensure work is undertaken in good faith, thereby mitigating what has, at times, been an unnecessarily confrontational process.”

[2:35 p.m.]

He does give a caution. I’ll give the member some space in this regard. He says:

“What will be critical is that the RTB” — the residential tenancy branch — “establish a robust application and implementation process and that arbitrators assigned to these cases possess the necessary specialized knowledge to assess the technical nature of the proposed work.”

Now, I note that the Rental Housing Task Force work took place a while ago. Yet despite the recommendations, I can advise the member that in our first three years of government, we registered more rental units for construction than the previous government did in the previous decade: the B.C. Liberal government, 25,000 units from 2007 to 2016; and the B.C. NDP government, 29,000 units from 2017 to 2019. This is post–Rental Housing Task Force. In 2020, we’d already registered more rental units for construction by July than the previous government ever did — ever did — in an entire year.

I understand the member has concerns about supply. I understand he has concerns about landlords. We have concerns about supply, and we have concerns about the fairness of the program too. That is captured in the bill, and it’s also captured in the numbers.

B. Stewart: It’s obvious that…. I think that there are a number of different factors in how you measure these things. It’s interesting. Recent reports have shown that there are differences in terms of the amount of stock that’s being built — the slowdown, the lack of construction. COVID has impacted a lot of these things dramatically.

I think more importantly…. If the minister’s correct, I would commend the government in terms of being able to have achieved that. However, we do see that rents have gone up considerably — over $2,000 per year. So the whole concept of affordability…. I don’t know if the minister supports the idea that supply should bring down the cost of housing and make it more affordable. However, we’re seeing the inverse of that. We’re seeing that it’s costing almost $200 more a month for somebody renting in the city of Vancouver.

That’s not what this bill necessarily is about, but I am concerned about the economic impact in terms of being able to make certain that the rent task force recommendations are not necessarily leading to a choking off — where landlords will have the incentive to do that.

Going back to the quotation that he had from LandlordBC and a road map to certainty, I don’t disagree. I think that there is lots of room for grounds of disagreement in terms of a landlord-tenant relationship. I’ve not been one, but I know that I know people that have gone through that. Those numbers that he has just stated about the record that your government has created and what we did previously — I’d be interested in seeing that information.

I guess…. Can the minister just update on how many of the recommendations already from the Rental Housing Task Force…? How many of those have been implemented to date, just so we can get a sense of the 30-some recommendations that are in the report? How many more still have to be implemented?

Hon. D. Eby: I wonder whether I should be swapping with the Chair right now, as I note that the Chair chaired the Rental Housing Task Force as well. I appreciate very much his work on that.

[2:40 p.m.]

In any event, there were 23 recommendations from the Rental Housing Task Force plus two early recommendations, for a total of 25. With the introduction of this bill, should it pass, all but seven have become law in British Columbia.

B. Stewart: Mr. Chair, I know you were interviewed, in terms of the report and the excitement around it.

I would like to just ask: what’s the timeline of the full implementation, the ones that are not yet implemented, after Bill 7 is brought into law? What’s the timeline for the rest of the recommendations, or are they not being addressed at this time?

Hon. D. Eby: A couple of these recommendations require additional legislation, and a couple are purely operational. So policy work continues on those fronts, and we’ll certainly advise members if any changes are made.

B. Stewart: Just to be clear, some of the recommendations can be dealt with through regulation. That’s what the minister just stated?

Hon. D. Eby: I’ll just restate. A couple require legislation, so would have to come to this House, and a couple are operational in nature and are more in the nature of a policy or operational change. So I’ll advise the member, certainly, if there are any operational changes made that are recommended by the committee. Policy work continues on all of those remaining seven.

B. Stewart: That’s good. I know we’re going to get into more of the details as we go through the bill, but I guess there seems to be a fairly large shift here to go from regulation, in some cases, to legislation. That’s a big difference. I guess the question that we’ll likely want to pursue is: why is it that we need it? What was the matter with regulation? Why wasn’t it working?

So the full implementation date for those last two changes and the operational ones is when?

Hon. D. Eby: The member will have to clarify his statement about moving regulation to legislation so that I can understand better his concern.

As for the second piece, I don’t have a timeline to share with him yet, but I’ll certainly advise him if that changes.

B. Stewart: Well, I just really wanted to know about the rent task force implementation. I think, to be clear, the minister just said that he doesn’t necessarily know the last two. The other ones that are operational and policy, those ones, he doesn’t have the timeline on those. So I’ll accept that and thank you. But it appears that most of the implementation is being done with Bill 7 and previous work that was being done.

I just want to ask…. The minister’s colleague from Chilliwack last week was speaking in this House about housing. In his statement: “I’m a Gen-Xer, so I was able to buy a house and have applied for homeowners’ grants in the past. I think I’m the last generation.” That would be homeowners is what I’m assuming that that infers. “That’s what they’ll refer to us as, shortly, when everyone’s renting.”

Does the minister endorse the member for Chilliwack’s view that the Gen X generation is the last generation to own homes, and that in the future, it will be a renter’s life?

[2:45 p.m.]

Hon. D. Eby: I just wanted to take a second to recognize, since we are traversing well and beyond the bill, the member for Chilliwack and what an exceptional candidate he was in the election and how remarkable it was that we elected an MLA from Chilliwack.

It relates to this bill and the member’s question. We elected MLAs right up the valley. This is an unprecedented electoral breakthrough for our party, of which the member for Chilliwack is remarkably emblematic — inspiring young leaders.

There is no question, in my mind, that the reason we elected so many members up the valley is because of our government’s commitment to address the injustice of the housing crisis and its generational impacts. Our party and the member for Chilliwack have spoken eloquently about this many, many times. To pull one line from a member’s speech and pretend that that is somehow government policy or what the member stands for is…. I get it. It’s politics.

I just wanted to say, on the record, how proud I am of the member for Chilliwack, his advocacy for housing, standing strong in Chilliwack for affordable housing, representing those families in Chilliwack that felt abandoned under the previous administration in relation to housing, and how proud I am of all of our MLAs up the valley and the Premier for putting forward a progressive housing agenda that got them elected and that we’re implementing.

Let me tell you. When you are building, as a government, more than 26,000 units of housing in the first four years that you’ve been elected — rental housing and affordable housing for purchase, and we’re just getting started — it’s no wonder that we had that success. It’s no wonder we have amazing MLAs like the member for Chilliwack. I congratulate him for his housing advocacy.

I recognize that the perspective of many young people, that they have been shut out of the housing market for a long time, is a real perspective. We have to do everything we can in this House, on both sides of the aisle, to address that generational unfairness and to give people an opportunity to have safe, affordable and decent housing for themselves and their families.

The member will see more to come from our government on that incredibly important question. I thank him for raising it.

B. Stewart: I did commend the member for his comments, but I do think that it is an important question. Is it the view of the ministers and the government that his generation will be the last generation to be able to afford housing? If that is the case, is Bill 7 the solution?

Hon. D. Eby: I think it’s the view of a lot of young British Columbians that they’re going to have a really hard time getting into the housing market. As a provincial government and with our partner the federal government and our partners the municipalities…. All of our levels of government have to recognize that.

That unfairness, which is shutting people out of the housing market, which is shutting their families out of the housing market, is unacceptable. We have to fight it. We fight it through legislation, through initiatives, through investment.

This is, for many people — many young people, especially — the political question. I say that even knowing that we are in a global pandemic. For these young people, housing is so tied to these issues, whether it’s the pandemic, families, child care, relatives or supports.

As Housing Minister, I was incredibly honoured to be selected for this portfolio by the Premier. I understand, as I know all members on this side of the House do, the critical importance of this housing question for British Columbians, especially young British Columbians.

We must fight the exclusion of thousands and thousands of British Columbians from affordable and decent housing for themselves and their families. We need to give young people a sense of hope that we are on their side in fighting for that. There’s no question that this bill is part of that.

If you live in rental housing in British Columbia, we want to tell you that you’re not going to just get turfed because some landlord wants to paint the walls and pretend that that’s a renovation that requires an empty apartment. You need to have some form of security in your housing.

[2:50 p.m.]

That’s not me saying that; that’s LandlordBC saying that. They’re saying: “We don’t want those bad operators to reflect on landlords in the province. But we also need to upgrade our buildings because they’re aging, because the federal government tax incentive program that built them was so many decades ago. We need to fix the plumbing and the electrical systems, and we need to make sure the buildings are safe so that they don’t fall apart.”

These are very reasonable perspectives. Preserving the affordable rental housing stock that we have, ensuring some level of security for renters who need that in order to know that their kid gets to keep going to the same school, that they get to keep an affordable commute to their job — these are basic issues for any family.

This bill is exactly tied in to that question and our fight for British Columbians who are feeling that housing crisis acutely and who don’t feel safe and secure in their rental housing. They watched their friends get evicted. They are thinking about having families or are having families and saying: “Can we stay here? Can we stay in this place?”

This bill is part of that, part of our housing response. But it’s just one part. The other part, as we keep talking about, is we gotta build some housing. We gotta build rental housing. We gotta build affordable housing for purchase. We’ve gotta build workforce housing. Housing is vital infrastructure for our province to succeed, for people who live here to have successful lives. I think it’s basic, and I think this bill is part of it. But it’s just a small part of it, and we’ve got lots more to do.

B. Stewart: Thank you to the minister. Well, I don’t think that we disagree in terms of preserving and assuring that housing stock is really important. I mean, British Columbia is home to 60,000 new British Columbians every year. We have unprecedented low interest rates allowing people to be able to buy or finance and do the things that will help increase and address what the minister has just stated.

We’re in a situation where what…. I guess the thing about it and what I’m really getting at is that we’re not really addressing the supply side. Of the 29,000 units that the minister just referred to — I checked back in my notes — only around 3,250 units are actually complete and in operation. We’re a far cry from delivering on all 29,000. So we do need to work harder on that. My end goal in Bill 7 is to make certain that the government is doing everything possible to achieve that and that we’re going to go through and see that in the end here.

One of the questions I have in the first section is the examples of the standard versus other material term that’s in section 32(4), the amendment — just the term “other than a standard term or…material term.” I’d just like him to explain, if he could, what the difference is between those two terms, please.

Hon. D. Eby: A standard term is when the rent should be paid, and so on. These are standard terms that are in all rental agreements. A material term is a term that is so significant to the rental contract that if it was breached, the rental couldn’t continue. That’s the distinction.

Now, just to set the record straight. A very unfortunate report issued by the member’s party — I’m sorry to hear him cite it — about the housing starts under our government. As of January 2021 — here are the facts for the member — the government has 26,283 homes complete or underway. That includes 7,054 homes complete, 9,210 in active construction and 10,019 in local municipal planning approval processes.

[2:55 p.m.]

The member, his party, released a report that excluded several streams of funding for affordable renting from their numbers, which was very unfortunate — including student housing. I note that in 16 years, the previous government built only 130 student housing beds. We’re building almost four times that in one building at BCIT.

We have almost ten times more housing and construction in development today than the previous government did in 2017. We’ve got 20 percent more housing starts generally than the old government projected for this time period in their 2017 budget. And 18,000 more condos are now being rented out in Vancouver instead of sitting empty, thanks to the speculation and vacancy tax. We are doing a lot on supply. We also need to make sure that the legislation makes sense, which is what we’re doing here today, I think.

B. Stewart: I just want to be clear. This section is dealing with the Manufactured Home Park Tenancy Act. I want to be clear about the terms and just ask if the minister could give me an example of, especially…. The standard terms, I think he made clear, but the second part, which is the material term — just what an example of that is, please.

Hon. D. Eby: An example of a material term — where, if it were breached, the rental housing contract could not continue — given by staff is an electrical feed being the responsibility of the landlord to provide to the tenant’s unit. If that were breached, it would be functionally impossible for the tenant to continue to live at the site. So that would be a material term.

I neglected to introduce staff. I said I would. I didn’t have the list immediately in front of me. I’m joined by a couple of the members that briefed my critic — Cheryl May, assistant deputy minister, and Tyann Blewett, director of policy, both from the office of housing and construction standards in my ministry. I’m also joined by Brad Sparrow, senior policy analyst in the office of housing and construction standards as well.

Clause 1 approved.

On clause 2.

The Chair: On clause 2, Kelowna-Mission — no, Kelowna West.

B. Stewart: I haven’t moved across the lake yet. I do look across, and I come downtown. My colleague that represents that area is right here in the House, and I’m sure she’d like to speak to this bill because she has extensive background in building and construction.

If the minister can be clear about if park utility charges…. Okay. Section 2 establishes a rent freeze for 2021, I guess, as it relates to manufactured home parks. Can the minister just clarify if the park utility charges are also frozen through this rent freeze for manufactured homes, or does that remain flexible?

Hon. D. Eby: If they are paid for by the landlord and passed through to the tenant, then yes, they are frozen as well.

B. Stewart: So just to be clear, the minister said that if the landlord is including those utilities in terms of that, they are frozen until the end of 2021. I’m certain that that’s what I just heard.

[3:00 p.m.]

The costs that are out of the control of the landlord or the owner of manufactured home parks, such as not only property taxes but water and other utilities that are provided for service fees that are provided to the tenants within a manufactured housing development. If those are passed on by the landlord, then those remain frozen until the end of 2021. And then, after that, my understanding is that it’s only at the B.C. consumer price index that the landlord would be able to increase to be able to recover those increases. Is that correct, Minister?

Hon. D. Eby: After 2022 there’s a distinct and separate equation for manufactured home parks, which is that the allowable rent increase is inflation, but plus a portion of the utilities divided by the number of units. So they can continue to pass those costs through, starting again after the rent freeze in 2022.

A. Olsen: Thank you to the minister for his responses. Some of the conversation that we had, the Rental Housing Task Force, was around the flexibility and the ability for landlords to be able to recoup any investments that they make through an increase in rent. Maybe the minister can talk a little bit about that. In this rent freeze time, leading to January of 2022, is that an option for landlords, or is this a total freeze on all rent increases up to that date?

Hon. D. Eby: I can advise the member that we are working on a process. The legislation in front of the House creates the possibility of regulation in this area, a predictable method to recover the cost of improvements to a building. Those regulations…. The policy work on that is happening right now.

The expectation is that we should have a system in place in the coming months and that landlords would be able to apply at some point this year, under a new system, enabled by those regulations. I’m afraid I can’t be more precise than that. That policy work is happening currently within the ministry, on the assumption that this bill passes the House, in particular the section that empowers the regulations for that particular recovery.

Clauses 2 to 5 inclusive approved.

On clause 6.

B. Stewart: So what would the rationale for the director reviewing a decision on their own initiative be?

[3:05 p.m.]

Hon. D. Eby: Under the current system, one party must apply for this kind of review to take place, but it may be that only the branch itself, the arbitrator, knows that a mistake was made. Currently they can’t initiate that process even though they know a mistake was made, because the legislation only permits the parties to the dispute to apply. The gap that is meant to be addressed here is that where the director is aware of an error, the director could initiate the process to correct that and improve fairness through that mechanism.

B. Stewart: Just in this section 72, the amendments, can the minister provide an example of where this added prerogative would be used and what it’s intended to accomplish, please?

Hon. D. Eby: The authority is narrow and is prescribed by the legislation. An example is if the director was aware that evidence had been uploaded to the wrong file or there was some kind of technical issue that interfered with the fairness of a hearing — so the evidence wasn’t available to the disputants in the party. It’s an example of where the director could say, “Okay, that wasn’t fair. That evidence should have been there for the hearing,” and allows the director to revisit that file.

B. Stewart: Again, on section 6, there’s an added subsection (b.3), and it speaks to technical irregularities. Can the minister provide an example of a technical irregularity, how this would affect a hearing and how the director would go about fixing it under this new section?

Hon. D. Eby: The residential tenancy branch relies on a digital system for managing evidence and hearings as well as the telephone calls between the parties. Any number of issues could arise with that digital system, and it’s difficult to anticipate exactly what they look like until they happen. If they affected the fairness of the hearing, then the director would have the ability to review a decision and make additional determinations to ensure fairness.

As with most digital systems, things do happen. So having this ground, where a party might not be aware that their hearing was affected by some sort of issue with the system, is an important one.

Clause 6 approved.

On clause 7.

[3:10 p.m.]

B. Stewart: Clause 7 it relates to: “in subsections (1) and (2), by striking out ‘documents’ and substituting ‘records.’” Could the minister just illustrate the difference between records and documents and what was previously excluded by this change?

Hon. D. Eby: Record is defined in the Interpretation Act, and it’s broader than document. In the Interpretation Act, “record” includes books, documents, maps, drawings, photographs, letters, vouchers, papers and any other thing on which information is recorded or stored by any means, whether graphic, electronic, mechanical or otherwise.

This allows the director to compel records from a person such as a contractor, for example, who is not under investigation but has records related to the investigation, and doesn’t unduly limit the type of records that could be accessed to exclusively documents or create an avenue for arguing that a particular record is not a document and is therefore not accessible. It broadens the term because, obviously, there are a wide array of records that could have important information that may not be considered documents.

B. Stewart: You just mentioned that a third party that is not under investigation or review may be compelled to provide these records to the director. What tool would the director have at their disposal to being able to force those records to be released? There is the law, but what tools would the director have to use if somebody chose to be non-compliant?

Hon. D. Eby: The director would be in contact with the third party to make the demand for records. If the party elected not to cooperate with the demand for records, the director has the ability to level an administrative penalty of as much as $5,000 a day. Obviously, the context would be very important about the amount of the administrative penalty. But it could be quite significant for non-compliance.

Clause 7 approved.

On clause 8.

B. Stewart: Moving on to section 8. There’s a repeal of 80.3 in the Manufactured Home Act. Sections (a) and (b) are being repealed and substituted. I guess my first question in this section is what examples can the minister provide of these contraventions?

[3:15 p.m.]

Hon. D. Eby: For subsection (a), this is the regular business at the residential tenancy branch. If a tenant or landlord is regularly not following the requirements of the acts and the situation is so severe it calls for an administrative penalty, that’s subsection (a).

For subsection (b), an example is the example that I just shared with the member about failing to provide records at the demand of the director.

For subsection (c), if a person provided a falsified document at a hearing, which is something that has happened at the residential tenancy branch, this provides a way for the director to reflect that that is not acceptable conduct at a hearing in front of this tribunal.

B. Stewart: I wondered, in terms of the contraventions, prior to this amendment, how frequent or how often have these laid-out types of contraventions occurred? What’s the frequency, please.

Hon. D. Eby: Mr. Chair, you’re going to remember this, when we had the residential tenancy branch legislation where there were lots of good rules but they didn’t have the ability to ensure compliance. In May of 2019, we established a compliance unit within the residential tenancy branch that had the ability to receive complaints about noncompliance with the act, investigate them and encourage people to come into compliance and, if not, to levy administrative penalties.

Since May 2019 and the establishment of the compliance unit, there have been 260 complaints filed with the unit, and 160 investigations flowed from those 260 complaints. Of those, the vast majority — overwhelming majority — of landlords and tenants came into compliance following the investigation’s findings. But in 14 cases, they did not. So there were 14 penalties issued under the act. Ten of those penalties were awarded against landlords and four against tenants.

B. Stewart: Is there any chance that this section gives the power to the director to create a sanction — like a win-lose situation? I guess there’s a lot of power residing in the director in terms of these things, and the penalties are obviously fairly severe.

[3:20 p.m.]

I just want to probe if, in his judgment, being Attorney General, is the degree of fairness…? We’re not moving towards a kind of…. Well, I’m assuming it is a little bit like an arbitration — a win-lose situation. You make your case, and if you are unsuccessful, you lose.

I’m just wondering. Is that what this is going to…? Is it, essentially, creating the director as being the arbitrator, in this particular case?

Hon. D. Eby: The operating philosophy of the director of the branch is to encourage compliance with the act. That’s why the member hears about 160 investigations leading to just 14 penalties. In the vast majority of areas of dispute between landlords and tenants about compliance with the act, the compliance unit was able to encourage compliance on the part of one or the other or both parties. I just want to note, because the member seems concerned that there’s a significant expansion of the authority of the director under these amendments, that it’s not the case.

In the previous section of the act, before being amended by this bill, as sections of the act that were brought into being and maintained throughout the time of the previous administration, the entirety of subsection (a) — “contravened a provision of this Act or the regulations…” — was already in the law in British Columbia. It is right now. Subsection (b), “failed to comply with a decision or order of the director….” That was already in the law. This amendment only adds the section about “a demand issued…for production of records” or if you tender “…false or misleading information in a dispute resolution proceeding.”

I think most members of this House would agree that if someone produces a falsified document in a formal hearing, like a residential tenancy branch arbitration, there should be a consequence. Unfortunately, under the legislation, without this section, you cannot have a consequence — short of, of course, losing your arbitration. But there’s no additional consequence within the act that can be levied. There may be other penalties or other criminal processes, and so on, but really, there needs to be a consequence. That’s what subsection (c) is about.

The other is that you can give the director the ability to make decisions. But if a third party has records that are essential for the fair determination of the dispute, and that third party refuses to provide those records, we really need to give the director the ability to say, “We need those documents, or else there’s a financial consequence,” to encourage non-compliant parties to come into compliance. As the member can hear, from the statistics, just the existence of these authorities is, in the vast majority of cases, sufficient to encourage people to come into compliance.

It’s not a significant expansion of the director’s authority, but it does address some long-standing issues, where there were simply no teeth. One of those goes back to our establishment of the compliance unit, where there were many provisions of the act that made a lot of sense, but there was no way for the director to investigate or address abuse of the act, for example. That’s why the compliance unit has made a significant difference: the resources provided to it to be able to do these kinds of investigations.

Clause 8 approved.

On clause 9.

B. Stewart: Thank you to the minister for that answer on the previous clause.

[3:25 p.m.]

On clause 9, under “Review of administrative penalty,” which really follows along just what he was saying, can the minister describe an example of where the director would want to review an administrative penalty on their own initiative? I say “own initiative.”

Hon. D. Eby: An administrative penalty is a dispute between government and an individual. This is not part of the dispute resolution process.

For the areas that are enumerated in subsection (4) — that a person wasn’t able to be heard because of circumstances that couldn’t be anticipated or that a person has new and relevant evidence or that the person who performed administrative tasks for the director made a procedural error that materially affected the decision or that there was a technical irregularity or error or that the director didn’t determine an issue that the director was required to determine in order to levy the penalty….

For any of those circumstances laid out in subsection (4), the director might be the only party that knows that one of those issues came up. In that circumstance, on the director’s own initiative, we want them to have the authority to review the decision to apply an administrative penalty and not have to wait for the party that was fined to identify the issue themselves.

It’s just a matter of fairness and justice. If the decision-maker discovers a major problem like that, they should be able to reopen and modify the administrative penalty.

B. Stewart: How commonplace would it be for the director to have to operate on their own initiative? Is there some indication as to the frequency of that, please?

Hon. D. Eby: Before these amendments, the individual who had the fine levied against them had to request a review by the director for one of these types of problems.

Far more frequently…. The concern was, anyway — I don’t know about far more frequently — that people would just go to the B.C. Supreme Court for a judicial review rather than apply for reconsideration.

The goal is to prevent wasting court resources. Where everybody agrees a mistake was made — an administrative task problem or a technical problem — or some sort of evidence that wasn’t available at the time comes to light, we don’t want to waste the court’s time. The director should be able to reopen and reconsider and notify the party that’s affected that the fine has been cancelled or modified in some way because of one of these issues.

It saves the court time and saves the individuals involved the effort of going to the B.C. Supreme Court.

[3:30 p.m.]

[N. Letnick in the chair.]

B. Stewart: In terms of this…. I understand the minister has just stated that this is actually to take things out of the court system and to have a procedure that allows for the director of the RTB to be able to make decisions.

When it comes to appeals of the penalties and review, what will provide finality through the process so that the decisions are not caught up in an endless stream of appeals, Minister?

Hon. D. Eby: The review process will take place. If a party’s not satisfied with the outcome of the review process, they still have the ability to go to B.C. Supreme Court through the judicial review process. This is just an attempt to address any obvious issues that everybody agrees on, without having to go to court for that purpose.

Clauses 9 and 10 approved.

On clause 11.

B. Stewart: With clause 11, just wondering if I could ask the minister if he could elaborate on the types of restrictions that will be placed on changing park rules.

Hon. D. Eby: I understand from staff that the recommendation from the Rental Housing Task Force was quite high level and that there is some additional policy work that is required around this section.

This is a section that creates the possibility of regulation. As part of that regulation drafting process, it is staff’s intention to engage with representative organizations for owners and landlords to determine the appropriate frequency, for example, under this section.

B. Stewart: Thank you for that answer. Would the minister be able to provide an example of what new regulations are intended to prevent and how they will be enforced?

[3:35 p.m.]

Hon. D. Eby: I understand the intention behind the recommendation by the Rental Housing Task Force was to prevent frequent rule changes that made it difficult for owners of these types of homes from understanding what rules they had to conduct themselves by, in order to keep their housing, and also that in some unfortunate instances, there were, at a minimum, allegations of owners of these parks targeting individual tenants with rule changes in order to either encourage the person to sell their home and leave the park or otherwise change behaviour that was otherwise lawful and consistent with the rules.

The hope is to give some certainty and predictability around park rules for everybody that lives in a manufacturing home park.

B. Stewart: Again, thank you, Minister, for that. I think everybody appreciates certainty in knowing what the rules are.

Is there going to be, Minister, a standard timeline for the frequency of park rule changes? If so, what would that be?

Hon. D. Eby: This recommendation was quite a high-level recommendation by the task force. Staff had advised that they’re going to be doing some more engagement with the sector in drafting the regulation with the frequency period.

B. Stewart: This type of engagement you refer to — will that be public engagement, or how would that take place? I think, obviously, there are a lot of manufactured home parks all over the province. I think that they come in all shapes and sizes, as did renters when the rental task force chair took his consultation around the province.

Could you just be clearer as to how these manufactured home park owners are going to be consulted in terms of…? You said high-level, but could you be a little bit more prescriptive as to how this will unfold, please?

Hon. D. Eby: I’m advised that the engagement process has not yet been designed. If the member has suggestions about particular groups that should be engaged, certainly I would be glad to pass those on to staff to make sure they are so engaged. But I can advise the member that there is a provincial park owners association, and obviously they would be engaged on this question. There are several manufactured home owner associations across the province that will also be engaged in this process.

B. Stewart: Well, I appreciate that there are associations, and they’re a good source of information. What about the residents that are in…? You know, there are literally, I’m sure, hundreds of thousands of residents in British Columbia that live in manufactured home parks. Will they be included in some way, shape or form so that their concerns are addressed, or do you have some other idea as to how they’re going to be consulted?

Hon. D. Eby: There are a number of manufactured home owner associations that would also be engaged through this process.

[3:40 p.m.]

B. Stewart: Again, further on this, in the calculations…. Okay. In subsection (b), repealing (q) and substituting with (q) respecting rent increases, will this section bring about the process for above-guideline rent increases recommended by the task force?

Hon. D. Eby: Yes.

B. Stewart: Is it intended that the process for approving rent increases above guidelines will be substantially different from the process in the tenancy act? If so, how?

Hon. D. Eby: The policy work is ongoing on this, but the intention is to provide a straightforward, predictable and transparent process so that a landlord understands, before making an investment, whether and to what extent they would be able to recover that cost through rents, or what portion of that cost would be recoverable. That is different than the current act, which doesn’t provide that level of predictability. That’s our goal in the work that we’re doing currently.

B. Stewart: Just in terms of this section 11, I just wanted to…. If the minister could describe, I guess, the measure of reasonability for what is allowed under these increases. Does he have a range or some ideas as to how they will define what reasonableness is, please?

Hon. D. Eby: That policy work is ongoing. If the member has any suggestions about groups or individuals or particular proposed policies that would be instructive in terms of this, I’d certainly be happy to receive them. But I’m not in a position right now to advise the member on potential ranges. That policy work is happening right now.

Clause 11 approved.

On clause 12.

B. Stewart: I just wanted to…. There are a couple of my colleagues that have comments on section 12. I’ll start off with a couple of questions, and then I’d like to refer the member for Cariboo North, who has a question.

Section 12 establishes a rent freeze for 2020 as well as 2021, as it relates to normal tenancies. Can the minister explain why this is being done by legislation instead of regulation, as it has been traditionally done before?

[3:45 p.m.]

Hon. D. Eby: When the pandemic began, we didn’t know how long it would last. Landlords were allowed to continue to issue notices to increase rent. The intent of including this provision is to minimize confusion on the part of either landlords or tenants about the relevant dates and the effect of those notices that may have been received during that period. If a landlord wants to increase the rent for 2022, that landlord should be issuing a rent increase notice to tenants in September of 2021.

B. Stewart: Minister, I was asking about why this is being done in legislation, versus regulation. I guess the question is: is it necessary? Or why is it necessary to change from that model that we’ve been using for, I’m sure, decades?

Hon. D. Eby: The intent is to minimize confusion about a fairly significant change. Many tenants look to the act or to policy papers on the residential tenancy branch website, and many landlords as well. A much smaller number would be looking at regulations under the act. By putting it in the act, we draw attention to it, and we underline the significance of it, and it provides greater clarity to both landlords and tenants about the relevant dates. It is a significant change, so we wanted it to be as clear as possible to all parties, to minimize disputes and confusion.

The Chair: Member, through the Chair.

B. Stewart: Thank you, Mr. Chair.

I guess, Minister, this is one of the areas where I perhaps struggle with Bill 7 because of the lack of a dynamic. I understand the minister’s point in suggesting that it’s very absolute and clear. However, there is a delay in terms of…. Although the B.C. CPI is embedded in the legislation as being the inflationary factor….

I don’t know how many in this House were working in the ’70s, but I can remember inflation running at 10, 15 percent and interest rates in the early ’80s hitting 22 percent. Those are factors that are so significant that legislation is going to be very difficult — and, of course, it puts people behind the eight ball. It’s very difficult, especially for projects that are even in process to actually recover their costs and make certain that they’re able to sustain what it is.

I guess my question is: has that really been considered? In terms of the fact that, even though the economy and interest rates are under 2 percent at the Bank of Canada today…. If things were to double or triple, which would not be unusual…. I was a banker, and we did banking at 10 and 12 percent, for decades, in this country. Anyway, have they considered that?

Hon. D. Eby: I can advise the member that CPI is not in this section; nor is it in the bill. CPI is in the regulation. The member raises a reason why perhaps CPI might not be an appropriate measure if things get out of whack. I’ll note that CPI was in the regulations when their government was in power. Of course, there was an additional increase beyond CPI every year, and that was done away with by our government.

[3:50 p.m.]

With respect to…. I had a little bit more information from staff about the reason why the rent increase notices were cancelled through the legislation instead of through regulation. I’m advised that there was no regulation-making power that allowed the cancellation of notices that had been received, notices of rent increase, so it had to go under the legislation as well.

The member can take my earlier comments as another reason, but the staff advised that one of the largest influences on it being in the statute is that there was not a regulation-making power to cancel those notices.

B. Stewart: Well, having been in this House for a few years, I just know the ability to adjust regulation. I accept the minister’s fact that there is no ability to empower the director of the RTB to be able to have that authority. I do worry that it is an impediment to being able to be dynamic in a market.

We know that the government promised that it would be ending rent freezes in 2021, in the most recent provincial election. After that, the action that took the rent increases to the rate of inflation will be made permanent. Is this legislation permanently capping rent increases to the rate of inflation?

Hon. D. Eby: This section has an important purpose. I’m worried that the member is not following along with what the purpose is. This amendment invalidates annual rent increase notices that are currently suspended and allows landlords to serve new notices of rent increase for 2022. So without this amendment, the rent increase freeze on annual rent increases would end on July 10, 2021. So it extends the rent increase freeze on annual rent increases until the end of 2021. There is no connection to CPI or inflation or anything like that. That is all in a separate regulation that is not part of this section at all.

B. Stewart: I’m not certain that…. Maybe I have misheard, but is the government backing off on its campaign promise by not including a permanent cap in this bill, or will the minister be tabling additional legislation to provide a cap for certainty on this?

Hon. D. Eby: The continuation of the rent freeze — a campaign commitment. Once it expires, the return to the state before, which was that the only allowable rent increase is the CPI inflation rate.

B. Stewart: My colleague from Cariboo North has a question in regard to this, please.

C. Oakes: Thank you for the opportunity to ask a question on behalf of stakeholders that I’ve certainly heard from.

I want to first acknowledge the investment that the government has made in post-secondary education. One of the things that I’ve heard from various post-secondary stakeholder groups, such as the Alma Mater Society and the Graduate Student Society of UBC, is the challenge that they’ve experienced with the fact that student housing falls outside any of the supports that the government has put forward. In fact, effectively, the eligibility for student housing leaves them out of programs and policies, such as the legislation in Bill 7 around the rent freeze.

I know that this is certainly not something that the government made intentional. I think it is something that the post-secondary advocacy groups have done an outstanding job on, meeting with all members, or at least have effectively offered to advocate and meet with all members of this House.

[3:55 p.m.]

I think it’s an important piece or gap that the students raise. While it may not be specific to this particular clause, it is about the rent freeze and how post-secondary students who are absolutely struggling during the pandemic…. Those who live in the existing student housing that the province has are struggling, and they’re hoping that programs such as the rent freeze apply to them as well.

To the minister: will the rent freeze and the programs that the government has announced be applied to student housing across British Columbia?

Hon. D. Eby: The member is right to note that students are not captured under the Residential Tenancy Act. As I understand, some of their advocacy…. They would prefer a model of the Residential Tenancy Act for students that recognizes the unique nature of student tenure. The member rightly notes that because students are not captured under the Residential Tenancy Act, this rent freeze does not affect students or the decisions made by post-secondary institutions about rents in their housing.

Government has provided $3½ million of funding to post-secondary institutions to support students in crisis because of COVID. Many institutions are providing additional financial support of their own above and beyond that amount. Under this bill and under this freeze, there is no student housing rent freeze.

The Chair: The member for Cariboo North.

C. Oakes: Thank you, Mr. Chair. He answered my question.

B. Stewart: Thank you for the minister allowing that question. I guess in recognition of his response, is there anything being contemplated for student rent controls in student housing to give students the certainty that has been mentioned here about this bill many times earlier today?

Hon. D. Eby: That would be an appropriate question for my colleague the Minister of Advanced Education, perhaps during the estimates process. I’m not aware of any in my ministry, but I wouldn’t necessarily be aware of that. That work would be happening in the Ministry of Advanced Education in their relationship with post-secondary institutions.

B. Stewart: I think it’s important, because there are not-for-profit housing groups, low income, B.C. Housing. I think it’s important that we put them all out on the table here and ask the minister to…. I realize he’s deflected the question about student housing to the Minister of Advanced Education. I’m sure my colleague will bring that up. But the question about these other groups, which is in the minister’s purview — how do they fall under this, or do they not at all?

[4:00 p.m.]

Hon. D. Eby: I think — but again, there’s always an exception that’ll catch you off guard — the entirety of the housing block that the member is talking about is subject to agreements with tenants that make them rent-geared-to-income housing. Rent-geared-to-income housing is specifically exempted from the Residential Tenancy Act with respect to provisions like these.

It simply doesn’t apply because the rent paid by the tenant is based on their income, a percentage of their income, typically 30 percent. There’s an annual review with the tenant of what their income is, and the rent is adjusted accordingly based on their actual income. These rent increase or decrease provisions do not apply to that type of housing.

Now, there may be housing that’s operated by a non-profit that is entirely outside of the purview of government somehow and is not rent-geared-to-income housing. It’s just operated, maybe, by a church group or something like that. And the Residential Tenancy Act would apply.

I’m speculating, because I always feel like there are one or two exceptions that might catch you off guard. But as far as I’m advised, I can tell the member that non-profit housing in the province is rent-geared-to-income housing and that this section would not affect them.

B. Stewart: Well, I just was informed by my colleague from Kootenay East that there was a substantial rent increase for low-income seniors in his particular riding. I do think that it’s formula-based, it sounds like.

I guess my only question to the minister would be: would he be amenable to, at least, perhaps having a briefing so that we can answer those questions in our constituencies after this bill, I’m assuming, gets through the House?

Maybe I’ll go on to my next question, but I don’t want to stop him from answering that. Minister, can you commit today that you’re not going to implement vacancy controls?

Hon. D. Eby: To the member’s question, any member in this place that has a residential tenancy issue in their community…. I will absolutely make staff available to help them understand the relevant provisions of the Residential Tenancy Act and to assist them as best as possible in assisting their constituents. That can be arranged directly through my ministerial staff. That is a standing offer, not just subject to this bill.

Certainly, if a large group of low-income seniors are seeing a significant rent increase that may not be consistent with this bill, we’d love to assist to ensure that nobody is displaced from their home because they don’t understand the law or how to challenge it. Without knowing all the circumstances, it may be an appropriate case for the compliance unit that we were discussing earlier.

With respect to vacancy control, we do not have any intention of implementing vacancy control — which I understand can also be described as rent that’s tied to the unit rather than to the tenant, which is the current model in British Columbia — with one exception. There is a group of buildings, residential hotels, that are protected from conversion in some municipalities — and I’m thinking specifically of Vancouver — that are single-room-occupancy residential hotels. I have heard some suggestion that rent vacancy control for those units may improve access to those units for low-income people.

[4:05 p.m.]

We are doing some policy work on that, but we are not in any position to be introducing that at this time. But it is something that we are looking at, and I wanted to advise the member of that.

The Chair: Member for Kelowna West — and through the Chair, please.

B. Stewart: Thank you, Mr. Chair. In this particular section or clause, it obviously lays out that the rents will be capped or there will be no increase until December 31 of 2021. It does refer elsewhere…. I just want to make certain I’ve got the right clause.

I’ve heard from many landlords — not big ones, but people that are having one or two or five or six homes that are rented out on a basis. The concern that they have is the new formula that’s going to be set sometime — I believe it’s September of 2021 — where the B.C. CPI, without any other increase, will be the allowable rent increase in the Residential Tenancy Act. So they’re having difficulty in recovering the cost of maintaining an existing building under the new CPI formula. I’m just wondering how they can ensure, with these rules, that they’ll be able to be incentivized to continue to maintain, whether it’s roofs or other things that need to be maintained.

As the minister probably knows, a lot of the housing stock in the province is nearing six-decade-old age. In that particular case, many things are starting to need significant improvements. I know that we’re going to get further into that in section 14, but the exemptions around that seem to be very onerous. I’m just asking how he will ensure that this legislation doesn’t deter new rental investments.

Hon. D. Eby: Under the previous formula, an additional 2 percent rent increase was allowed for all landlords, regardless of whether they were making improvements to their housing or not. This new approach is to incent landlords to make improvements to their buildings through a predictable system of cost recovery so that they understand the business decision that they need to make about putting money into an aging building to bring it up to speed.

The hope is that by targeting these increases and supporting those landlords that are improving buildings for tenants — for everybody — and increasing the lifespan of buildings, we’re going to maintain more of our aging rental housing stock, improve it and, at the same time, bring more units on stream as we have been doing.

I note we’ve been quite successful in bringing rental housing online, and we’re going to do more. We had 29,093 new rental units registered for construction from 2017 to 2019 and 5,400 by July of last year — so good progress on that supply. But also, we want to encourage those owners of older buildings to invest into their buildings. We believe that tenants will support, where improvements are made, reasonable rent increases to help pitch in for that improvement experienced by everyone in the building.

[4:10 p.m.]

B. Stewart: Well, I know that you read a quote out earlier about LandlordBC and the objectiveness of these rules and things like that. I didn’t hear anything from them talking about the actual recovery of some of the increased costs that some of the landlords will be facing. They did a study that was just released, up to 2018, that showed that their average expenses increased at almost 8 percent per year, much higher than inflation.

I guess the question is…. The minister is aware of the strata insurance pressures which will affect rental accommodation. I don’t think there’s anybody that’s exempt from that. I know that there are clear rules under section 14 that talk about how the landlord is expected to come up with a plan, get permission, go ahead and do the renovations to remediate some of these 60-year-old buildings. I think that, as I started out by saying, there are 60,000 new British Columbians coming at an increasing percentage rate every year and more perhaps in the future because the federal government is encouraging that. We have to accelerate the pace of new rental stock, both houses and other units.

I guess the question is: how does the minister expect landlords to actually account for these increasing costs? How are they going to recover it?

Hon. D. Eby: The existing regulations do permit applications to the residential tenancy branch to recover extraordinary increases in operating expenses beyond CPI. That provision will continue. There will be a new provision allowing predictable increases for capital improvements to buildings. Finally, there will be an increase for CPI.

I note this is a delicate balance. The member is right to note this is a delicate balance. We want to support landlords in making improvements to their buildings so that they last and so that they provide a safe and reasonable housing option for people, and we want to address an issue that the member raised earlier on in this session about increasing rents and the cost of living in many parts of the province.

Part of this is absolutely a supply problem around rental housing. We went for a long time in the province without building enough rental housing, so we need to address that supply. But we also need to provide predictability to both landlords and tenants in rent increases. That’s what we’re aiming to do with this legislation and why we struck the task force to advise us on this.

B. Stewart: Well, thank you, Minister, for that. And to be clear, you said that there is an ability for a landlord to….

The Chair: Member for Kelowna West, through the Chair, please.

B. Stewart: Thank you, Mr. Chair. Through you to the minister, what I wanted to be clear about was that the additional expenses that landlords face that I mentioned in the previous question…. Could you just explain or tell me how it is that a landlord can recover these additional expenses over and above the CPI formula that’s outlined in Bill 7?

[4:15 p.m.]

Hon. D. Eby: The affected landlord can make an application to the residential tenancy branch, and they will make a determination based on the level of increase in operational costs as well as any financial loss incurred by the landlord in determining whether an additional rent increase beyond CPI will be allowed.

B. Stewart: I just want to make certain that…. Does the minister believe that landlords could run a deficit in order to provide rental housing and that that’s acceptable?

Hon. D. Eby: I’m not quite sure where that comes from in section 12. I don’t know. I guess you could run any business and potentially lose money. I guess it’s theoretically possible that that could happen, but with the increase in property values across the province, it’s extremely unlikely that that would be the situation faced by a landlord currently.

But in terms of operational costs, I absolutely accept that a landlord could conduct business in a way where their operational costs exceed the amount of rent that they’re taking in, and they could face an extraordinary increase in operational costs through no fault of their own. That’s why this provision exists — to allow them to make that application. It remains unchanged through this legislation.

B. Stewart: Just to be clear, to the minister, and I think that he stated that…. Well, first of all, he said: “Where does it affect this clause?” But the clause has the implied effect that with a cap and no rent increases, it’s assuming that the costs haven’t gone up. I know that he knows that there have been cost increases, and that after December of 2021, landlords that have demonstrated cost increases or whatever will be able to apply at some point in the future. I’m assuming they can’t go backwards and look at 2020 or 2021.

My question is…. With these pressures, and I’m talking about external pressures, tax increases…. I see our local community. The tax increase is set at just over 4 percent. It was similar last year. Some communities — as he well is aware, I’m sure — are way more than that, more than double. Those aren’t sustainable for landlords that have ever-increasing assessed values, which doesn’t necessarily mean…. They’re not getting that value back.

I guess my question really is…. He acknowledges that there is increased cost. There is a process in the future, after January 1, 2022, to make a case to the RTB about that. Is he suggesting that landlords may have to expect to run deficits? I realize that it’s completely within their responsibility to manage costs and stay within that. But the people that bought and have properties, that owned property before the pandemic in March of 2019 and whatever the interest rates…. If they’re now in a situation where they’re having to subsidize, is that acceptable? That’s my question.

Hon. D. Eby: The member is removing this temporary measure of a rent freeze from the context, which is a global pandemic where many people have seen dramatic impacts to their employment and income. The goal here is to minimize the impact, especially on lower-wage workers, who have been disproportionately impacted. Many people who rent do work in sectors that have been disproportionately impacted by the pandemic. So this is absolutely a statement of government policy and a priority, but it takes place in a context, which is that everybody is feeling the impacts of this pandemic in some way.

[4:20 p.m.]

As we heard from the member for Delta North earlier in question period, Dr. Henry says: “We’re all in the storm, but we’re all in different boats.” For the people who are in the rental housing boat, we’re saying: “We know that this is tough for you, and we’re not going to allow rent increases for a year.” For people who are in the landlord boat, we recognize it’s tough for you too.

Many landlords I’ve met with have given extensions to tenants. They’ve been understanding about rent, understanding that we’re all in this together and that we’re doing our best to support each other in a difficult time. I’m very grateful for that. Should they be subsidizing tenants who have lost their jobs because of the pandemic? Is that what the member is asking? I mean, I think it’s pretty great that they would do that. From a business perspective, maybe that’s not great, but I think that’s great.

Do I accept that it can be expensive to operate a building and to maintain it to high standards? Absolutely I do. That’s why this bill brings forward a very clear provision for landlords who are investing in their buildings to recover some of those costs. What we’re trying to do is strike a balance here.

I accept the member’s suggestion that it can be very hard, especially to be a very small landlord. I’ve met many landlords that struggle with their operating costs and try to provide a really positive experience for their tenants, both from a rent perspective and just the quality of the building that they want to maintain. It can be difficult for large landlords as well.

I don’t minimize those concerns, but I do note that this rent freeze comes in a context that the member is…. I wanted to say missing, but I don’t think that’s fair. I just think that it’s important to recognize this context that the member has not addressed in his questions and the fact that many landlords have, in fact, made the explicit decision, with their business, to subsidize tenants that are in distress in their buildings. It’s a pretty wonderful thing that they did that.

Clause 12 approved.

On clause 13.

B. Stewart: I had a couple of questions on clause 13.

This repeals old criteria for renovictions. Can the minister confirm that the other charge in use means of ending tenancies continues despite this section?

Hon. D. Eby: The answer is yes.

B. Stewart: It appears that while building owners must apply to the RTB with respect to renovations, demolition and conversion of the unit do not require an application. Is it possible that administrative delays could incentivize landlords to pursue demolitions rather than renovations?

[4:25 p.m.]

Hon. D. Eby: The mischief that this is aimed at is a landlord that wants to increase the rent. We do not have vacancy control in this province or rent tied to the unit, so the way to be able to increase the rent beyond what government permits is to evict the tenant.

How could you evict a tenant? Well, you could say: “I’m going to be renovating this unit.” The renovations could be cosmetic — countertops, paint, and so on. Then the obligation previously, assuming this bill is successful, would be on the tenant to challenge that at the residential tenancy branch — to say, “Oh, the unit doesn’t have to be vacant” and “They don’t have their permits,” and on and on.

This particular provision takes place within the larger set of amendments around renovictions. Renovictions are a very specific activity of landlords that want to increase the rents in the existing building, want to get rid of the tenant and were using the ruse of renovations to evict the tenant and increase the rent.

It’s profoundly unlikely that a landlord would demolish that rental unit in order to build an entirely new building and increase the rents, because the cost involved in such a process would vastly outweigh the benefit. But it certainly is possible that that landlord may wish to demolish an older building and rebuild a new rental housing building with more units or because the building is at the end of its life.

Many municipalities have provisions that where an application is made to demolish an existing rental housing building, additional units need to be provided and certain commitments need to be made with respect to affordable housing as well as the ability of tenants to return when the new building is complete.

We’ll be monitoring this, and if we do see a sudden rash of demolitions across the province, certainly we would move to act. But that is not the mischief that this particular piece was aimed at. This was aimed at the attempt to increase rents in an existing unit with a cosmetic renovation.

Clause 13 approved.

On clause 14.

B. Stewart: I would ask if the minister could start by providing us an example of a renoviction that would be justifiable under the new section.

Hon. D. Eby: The section lays out the requirements for what a major renovation that would allow for an eviction consists of — section 49.2(1)(a). First of all, you have to have all your permits and approvals in place from the local municipality or district.

Second, the nature of the renovations or repairs require the rental unit to be vacant. You can provide any number of examples. For example, remediation that includes asbestos. You can’t have somebody in a unit where you’re mucking around with asbestos, for example.

The renovations or repairs “are necessary to prolong or to sustain the use of the rental unit or the building.” Then, finally, “the only reasonable way to achieve the necessary vacancy is to end the tenancy agreement.” It wouldn’t be enough that there was asbestos in the building. You’d have to actually to be able to demonstrate that you had to end the tenancy agreement because it wasn’t reasonable to do it otherwise.

[4:30 p.m.]

It’s a very high bar, but it is an achievable bar. It recognizes and provides the possibility for the return of the tenant. It gives tenants who are willing and able to move out during renovations or repairs the ability to maintain their tenancies unless that would be totally unreasonable.

B. Stewart: Thank you to the minister. He said that it is a very high bar. I mean, when you start researching and looking into the issues about the timelines on getting a building permit and the plans…. As it says in section 49.2, in order to proceed and move ahead, the landlord who is in possession of the rental unit…. It says: “…if all of the following apply: (a) the landlord intends in good faith to renovate or repair the rental unit and has all the necessary permits and approvals required by law to carry out the renovations or repairs.”

It goes on to talk more about “renovations or repairs require the unit to be vacant” and “the renovations or repairs are necessary to prolong or sustain the use of the rental unit or the building in which the rental unit is located” and “the only reasonable way to achieve the necessary vacancy is to end the tenancy agreement.”

This whole business about permits and approvals, that’s only one small portion of it. It takes a lot of pre-planning, and the minister has said that it is a high threshold — a high bar I think are his words. So what it is, is that somebody that is the owner of the particular rental unit, apartment, whatever, will require those permits.

[S. Chandra Herbert in the chair.]

Being that most of the stock in the province of British Columbia average age is 60 years, means that anything that was built prior to 1990 is suspect, and you have to get certification that asbestos is not a factor. If it is, that’s going to require…. Obviously, you can’t move ahead without the asbestos being removed. Meaning that the tenants…. It has to be vacated, cleaned up, removed and whatever. So it’s a kind of a chicken-and-egg thing.

You’ve got to get the permits, you’ve got to have the plans and you’ve got to get the asbestos removed, because most likely your building, if it’s built prior to 1990, and it’s going to require renovations is most likely going to have some form of or level of asbestos.

On February 28 of this year, the government brought in regulations around building inspections. They have to be part of a professional organization recognized in this province, building inspectors level 1, 2 and 3. Currently there is a shortage of building inspectors to actually be able to do the work that would be required to issue a permit, accept the plans and follow up in terms of all of the safety considerations that would be required.

In light of that information, just in one local community, they’re working on a backlog of 500 permits, they told me, when this bill came in. I don’t see how a landlord can meet that threshold without this process taking literally years. I’m sure if it’s immediate, like urgent, there would be nothing other than he’d have to perhaps move the tenants out early if it was to do with pipes or something that was unhealthy or whatever.

My question is that this clause is very comprehensive. It requires a very high threshold. I want to know from the minister…. I’m sure that it will reduce the number of renovictions, as it’s termed, but how is the landlord community expected to meet this threshold described in section 49.2(1)(a)?

[4:35 p.m.]

Hon. D. Eby: Well, if the member is concerned about the test, he should have words with Rich Coleman, who wrote it, I guess, when he was the Minister of Housing, I assume, or whoever the B.C. Liberal was who wrote the requirements.

It’s always been the requirement that the landlord have the permits in place before applying for eviction to demonstrate that the unit needs to be vacant, and so on. What this does is that it flips the obligation from all the tenants in the building going, “Oh my god,” and they’ve got to get all organized and go to the residential tenancy branch and say: “They don’t have the permits.” Then the landlord says: “Yes, I don’t have the permits.” Then everyone goes home, and then they get a new eviction notice the following week. Then they go back, and again and again and again.

It’s a huge waste of resources at the residential tenancy branch for bad actor landlords that have been abusing this section. It’s not even close to the majority of landlords but a group of bad actors that saw a way to try to circumvent the rent controls that are in place in our province, which pre-existed our government, and this test was put in place.

So this flips the test from the tenants having to go, “Oh my god,” and then off to the residential tenancy branch. Now it’s the landlord who goes: “Okay, I know what I have to do. I have to get my permits. I have to have my contractors ready to go. I’ve got to demonstrate the extent of the repairs that I’ve got to do here. I’ve got to think about: ‘Can I do this in a way that that allows people to maintain their tenancies or not?’” Then they’ve got to go to the residential tenancy branch and get that done.

There’s one application. The person who’s making the application has all of the information. It doesn’t require a multiplicity of applications from all of the people in the building, as well as repeated applications, over and over. So that’s the big change here. The member is very focused on the test. The test is not the big change. The big change is who’s responsible for going to the residential tenancy branch.

There are two court decisions that this test incorporates. One is called Baumann, from, I understand, the B.C. Court of Appeal, and one is called Berry, from the B.C. Supreme Court. They fleshed out some of the test that was in the original statute. As best as possible, we’ve codified that and put it into the provisions that the member sees.

It’s the old test, as interpreted by the courts, to provide certainty to everyone and to be able to draw on that jurisprudence. It flips responsibility from the tenants to go to the branch to say that this isn’t an okay eviction to the landlord to go to the branch to say: “Everything is in place. I’m doing this in good faith. The pipes are falling apart. The electricity’s falling apart. We’ve got to do a major renovation to this building to keep it as housing.”

B. Stewart: I think that probably…. You know, there was a lot in my last question. I appreciate the fact that….

Interjection.

The Chair: Sorry for the interruption, Members. Members are reminded to please check your cameras, your mouth, your devices to have them on mute, thank you, unless you have the floor.

[4:40 p.m.]

B. Stewart: So that’s good. I guess the question that…. This is a significant amount of responsibility. It doesn’t matter if it’s…. I think that, probably, the responsibility is in the right place. However, the question really is: how is the landlord expected to achieve that? I don’t know if, when I read the old act, it actually put the onus onto the tenants.

However, the question here is section 49.2, where the landlord is the one that is responsible. I guess, based on the fact that this information about the fact that…. Just over a week ago the rules changed in British Columbia that make it very difficult to have the necessary building inspectors. So this is not a short-term thing; this is a longer-term thing.

Is the minister, or the people that are bringing in Bill 7, aware of that difficulty and the onus that it puts on, and that actually may impede, necessary renovations for a very long time, just due to the fact that there’s a huge shortage of these building inspectors in the province today?

Hon. D. Eby: The member is assigning to a change related to how building inspectors are certified to ensure consistency. It’s a request that came to us from industry. Their concern is that one building inspector says one thing and another building inspector says another thing, and there’s inconsistent training on a consistent provincial building code — and to provide some minimum standards. He’s assigning to that change a long-standing challenge of many years around development approvals processes at the municipal level.

This is something that has been discussed in British Columbia since I’ve been in this place, and I was first elected in 2017. It’s so long ago — yeah, 2017. The issue of development approvals generally, for new construction as well as renovations in major cities — Vancouver, Victoria, all over the province — is a significant one, one that spawned a significant piece of engagement with the industry and with municipalities through the Minister of Municipal Affairs.

That resulted in a report, recently released by government, called the DAPR report, the Development Approvals Process Review. That review process made a number of recommendations to government about how we could support municipalities in expediting approvals processes, both for renovations and for new construction. I definitely recommend it to the member, as it’s very helpful reading about what needs to be done to address some of these issues. It’s something that I know my colleague is working on, in partnership with the Union of B.C. Municipalities.

As Housing Minister, it’s incredibly important work because there are many, many units of housing, including affordable and rental housing, that are stuck in various approval processes around the province and that we need to get built, because we are in a housing crisis. That work is happening, but the member mistakenly attributes that to a regulatory change that government is making around building inspectors. It’s far more profound than that and far more long-standing.

B. Stewart: Being that this clause 14’s objective is to prevent or to stop the renovictions which were outlined in the rental task force, I would just like to…. Is the minister expecting these changes to reduce the number of overall renovictions? What’s the number? Do they have some quantified number as to what they see as the change, the reduction?

[4:45 p.m.]

Hon. D. Eby: Mr. Chair, I’m sure you could enlighten this House about how many times you saw tenants who were evicted, then challenged it at the residential tenancy branch and the dispute was abandoned, only to be met with another eviction notice.

It’s very hard, under the current system, to know exactly how big this problem of renoviction is. Fortunately, with this change, we will know exactly how big the issue is and what’s happening, because in order to get your order of possession as a landlord, you need to make that application to the residential tenancy branch. So we’ll have very precise statistics about what’s happening with rental housing, which makes sense when you’re in a crisis — to know exactly what’s happening with the housing stock.

This change is going to provide significantly better statistics. About 350 tenants a year disputed an eviction for renovation, but we only know which ones were disputed and went to dispute resolution.

A. Olsen: The Attorney General’s Wikipedia page says he was elected in 2013, not 2017.

Interjection.

A. Olsen: Yeah, that’s right.

Just a couple of questions on this section. With respect to the director’s decision point, as I read this, it seems to be clear. But I just want to clarify for the record that if a building owner has all of the 49.2(1) through (4), I guess, in order, then the director makes a decision to approve the eviction request that’s being made. Is that correct? Is there actually…? Other than reviewing whether or not the owner is complying with all of the aspects of this section, is there any other decision that that director can make other than to approve that eviction?

Hon. D. Eby: The landlord will present evidence on sub-subsections 49.2(1)(a) through (d). The tenants do have the opportunity to attend and provide evidence as well in respect of those different requirements and whether or not they’re met. Then the arbitrator will make a decision about whether or not they are met.

I note that there are additional requirements in 49.2. For example, if the landlord’s doing renovations or repairs to more than one rental unit in the building, there’s a requirement to make a single application for orders with the same effective date. So there are other requirements that have to be met in addition to subsection 49.2(1), but for the most part, the member is correct. That is the heart of the protection — that the landlord has to satisfy those requirements and the tenants have the opportunity to provide evidence.

If the landlord successfully makes out those requirements and the arbitrator rules that the evictions can go ahead, it starts a four-month clock that’s outlined in subsection (4) for evictions.

[4:50 p.m.]

A. Olsen: Just to be clear that prior to this bill being put on the order papers, it was still within the responsibility of that building owner to have all of this documentation in place — all the permits, all the plans, everything in place — to be able to identify what the project was that was going to need to have the eviction.

There was a situation in which all that work needed to be done. Was there or is there anything in place so that if a decision by an arbitrator was to not support that eviction, all of the costs and the fees that have been incurred by that landlord…? Is there anything to deal with those costs that have been expended already?

Hon. D. Eby: Well, they can still go ahead with the renovation, but they just can’t end the tenancy of the person in the unit or the people in the building. This isn’t about whether or not the renovation gets to go ahead. This is about whether or not the tenants can be permanently evicted from their housing in order for the renovation to go ahead. So all of that investment in the plans and the permits and so on will still be realized in terms of improvements to the building.

Then, one would assume, you’d be seeing an application from the landlord for: “We’ve made these capital improvements to the building. We’d like to recover some of those costs through the process that we were discussing earlier.”

B. Stewart: One of the things that…. Because of the age of the rental housing stock and buildings in British Columbia, I just wanted to know how asbestos removal and the process…. It seems to me that this is a little bit of a chicken-and-egg requirement. I guess I’m just wondering: how does the landlord deal with asbestos removal in a building that was built prior to 1990? And how do they deal with that, in terms of the sequencing with the building permits and the plans and the approval from the RTB?

Hon. D. Eby: The member is asking a very specific question about removal of a hazardous substance. I regret to say that the relevant expertise about asbestos removal…. The testing processes, abatement, and so on — we don’t have that expertise on the team that’s advising me on the phone, and I don’t have it myself. What I will do is that I’ll provide more information to the member about that specific issue.

My guess would be that — having seen asbestos testing at a residence before, in relation to renovation — you would test for the presence of asbestos. If there is, then you would retain a firm that’s expert in asbestos remediation that would provide you an estimate and a plan for work for removal. That, in addition to your plans for renovation, would be your evidence to the tribunal about why you needed vacant possession of the units for an extended period or not. If it was in relation to a small subset of pipes, for example, or some electrical areas you needed to get access to, maybe you didn’t need vacant possession of the units for an extended period of time.

Whether it’s asbestos or lead or any other sort of hazardous substance that may be found in a building, you would need to provide evidence to the tribunal about the length of time it takes to remediate the site and whether or not the work can be done with people living in the building or not, and if not, how long they would need to be out of the building for. All of that would need to be considered by the arbitrator in terms of whether or not it’s reasonable to do the renovations without ending the tenancy agreement or whether the only reasonable way to achieve the necessary vacancy is to end the tenancy agreement.

[4:55 p.m.]

B. Stewart: Well, the reason that this comes up is that it’s a chicken-and-egg kind of criteria. I mean, if you do go to get a building permit from your local municipality, it does require that certain conditions are met. And of course, the preceding homes that are being renovated or buildings that are older than 1990 do require that they do have the test, as the minister had pointed out.

That process does take some time, based on the availability. It’s at least…. From the time that you start and make the application, with the asbestos companies that I’ve checked with, you’re going to need at least four weeks from the start to finish — to being able to actually to have WorkSafe’s approval to go ahead on the building and meet the requirement, which means it has to be entirely vacant.

If I follow this through and I want to do the renovations that I am proposing, and I go to the local governing authority, I have to lay out, in terms of the changes…. I need to make certain that I get their building permit, that it’s approved, subject to any conditions that they put on the project. The next thing that I have to do, according to the act, is a minimum of 120 days’ notice to the tenant in order to action this and then have the asbestos dealt with first and then the renovation.

In some cases, building permits are usually issued for about a year. Sometimes it’s more than that. Sometimes there can be extensions granted. But I think that it is a very tight window, especially considering the fact, as I mentioned earlier, about the shortage of building inspectors, which is a new issue. And I agree that the standards…. They should be standardized, and that is important.

I think this clause is super important in terms of being able to realistically achieve what is suggested under the…. I understand the desire to end renovictions. However, I want to make certain that it’s realistic that a landlord in British Columbia is going to be able to execute on all of these requirements that are listed under 49.2 and be able to actually achieve success and not end up having a tenant move out and things taking longer because of shortages of trades or whatever happens, and be in a situation where they’re in violation because they haven’t been able to bring the tenant back, even though they’ve got vacancy.

That’s the reason that I go down this rabbit hole, if you want to call it, about asbestos. It’s a catch-22. I guess the question to the minister, based on what I’ve just said here, is: has it been thought through properly, one step at a time? I know that this is not necessarily always the expertise within his ministry. But the other ministries that are here, people that are in the profession, building inspectors, cities — have they worked through that this is achievable? That’s my question.

Hon. D. Eby: I can advise the member that, certainly, staff have been in touch with cities in the province to determine their work flows to make sure that this is, as he says, achievable. But I want to also point out that this test is unchanged from the previous test. This was always what landlords had to meet.

I’ll confess that this situation of asbestos remediation, building permit times, and so on, is not one that has come across my desk prior to the member raising it. I’m not sure if he is concerned in sort of a speculative way about this or whether he has specific examples of timelines that simply don’t meet this set of requirements.

I’ll say again that there hasn’t been a problem evicting tenants for renovations under this test previously — or just defeating tenants through exhaustion. All we’ve done is flip the responsibility to the landlord. Rather than having to respond to the application from the tenants, now the tenants are responding to the application from the landlord. And we’ve incorporated some of the court decisions directly into the section.

[5:00 p.m.]

The member is quite insistent on his point about business, about building inspectors. Certainly, I welcome any kind of documentation or substantiation of that concern, and if there is a concern, I’m happy to look at it.

I can advise the member that this was something that was asked for by the construction sector that was very frustrated with how building inspections were being run and wanted some consistency. I understand that it’s being well received now that we are making these changes. But if he has information to the contrary, I’m glad to look at it and to address any concerns.

It’s a bit hard to deal with the member’s individual research about how long asbestos remediation takes. Maybe it won’t fit in here when…. We’ve been working with this test for a long time in the province. What’s changing is the responsibility, not the test. I’m simply not aware of this being a significant issue, but if the member has information to the contrary, I’m glad to hear it.

It’s just that sometimes we do need to bring expertise into the House. I saw the member from Skeena had some assistance from a younger constituent in his office. It was very cute and nice to see young people visiting our House, despite the pandemic restrictions.

B. Stewart: I know that the minister said that this process of the onus being off the tenant and onto the landlord is unchanged. But there has been a change. The requirement to prolong and sustain the unit is new. So it is not completely unchanged, as he just stated.

I’m happy to…. We can talk about that. I don’t know if that’s really the purpose. I just want to…. The fact is that it is changed, for whatever reason, and we do need to make certain that we’re comparing apples to apples here.

I just want to go back to the section (d) in 49.2. I want to know what the logic is in including a condition that the only way to complete the renovation is through vacancy. Is this condition necessary?

Hon. D. Eby: This is incorporated from a B.C. Supreme Court decision that’s binding on the tribunal and incorporates it into the act. The goal here is to prevent cosmetic renovations from leading to people’s permanent loss of their homes. So we have phrased that following the court decision, as is outlined in subsection (d), which is that we really only want tenants to be facing eviction if there’s no other way to achieve the renovation. It’s really as simple as that.

B. Stewart: Thank you, Mr. Minister. I want to know how is the RTB to assess what types of renovations require the unit to be vacant? Can the minister provide an example, in their experience, please?

[5:05 p.m.]

Hon. D. Eby: For the member, and for anyone that is interested in this important question about trying to anticipate, before going to the branch, about whether or not eviction notices will be granted, the branch is already making determinations. As I say, the intention with these provisions is that the test is the same.

The residential tenancy branch does have policy guidelines on their website about which types of renovations may and may not require a vacant unit and that the only way to achieve the vacancy would be to end the tenancy agreement. I will note that some landlords achieve quite substantial renovations without requiring an end to the tenancy agreement.

One of the major issues for landlords has been: if I put a significant investment into the building and improve the quality of the building, is there any ability for me to recover some of that cost? This bill also answers that. We’ve been over that in some detail. But I would refer the member to the policy guidelines of the residential tenancy branch about their best advice about trying to anticipate, before you go to the branch, whether or not an eviction notice would be granted.

B. Stewart: This whole business about landlords having, I guess, the certainty and, I guess, the vacancy…. I think the minister has just cited a very cooperative, collaborative approach, and I would hope that that happens more often than not. But I know that from the Chair’s perspective…. I’m sure that he knows of examples that are not quite as collaborative.

Is there a minimum vacancy, a vacancy timeline linked to the need to end tenancy, and how many days is that?

Hon. D. Eby: The reason why there’s not a specific timeline in the legislation is just the challenge, I guess, that has been realized of some landlords who really will stop at nothing to try to evict tenants. Our concern about putting a specific timeline in here was that if we did, it might incent people to stretch their projects just long enough to get over the timeline to be able to evict tenants. We wanted to avoid that.

What the preferred approach is under this act is that the landlord will present all of the information, the tenant will present their willingness or unwillingness to move within certain timelines, and the arbitrator will make a decision about the reasonableness of all of the circumstances that are presented.

B. Stewart: I guess the question is: how will “reasonable” be interpreted in subsection (d) when it comes to ending tenancy?

Hon. D. Eby: The word “reasonable” is a very common test in the law — whether something is reasonable or not reasonable.

[5:10 p.m.]

It will be determined by the arbitrator based on all of the evidence presented in relation to requirements 49.2(1)(a) through (d) and from the perspective of the arbitrator, based on the evidence that they’re hearing, whether the only reasonable way to achieve the necessary vacancy is to end the tenancy agreement or not.

B. Stewart: If the RTB, the residential tenancy branch, determines that ending tenancy is not an option, but the unit still must be vacant, will it be the landlord’s responsibility to put the tenant up in a hotel?

Hon. D. Eby: The short answer is no. It’s not the landlord’s responsibility to put the tenant up in a hotel during the renovations.

B. Stewart: What other obligations might the landlord face if tenancy cannot be ended but vacancy is required for renovation?

Hon. D. Eby: There’d be no other obligations on the landlord. Sometimes issues of quiet enjoyment might come up, but typically, where a tenant is willing to stay in a building that’s being substantially renovated, obviously, they’re having to agree to put up with a certain amount of noise, dust and disruption.

B. Stewart: This requires that renovations must be “…necessary to prolong or sustain the use of the rental unit or the building.” Can the minister define what types of renovations fall under the definition of “prolong” or “sustain”?

Hon. D. Eby: The intent behind this section is to capture major repairs — mechanical systems, pipes, electrical systems, and so on — and to screen out things like cosmetic repairs — new countertops, paint, new light fixtures, carpets, these kinds of things.

B. Stewart: Is the minister concerned that strict interpretation of this section could disincentivize repairs to rental units?

[5:15 p.m.]

Hon. D. Eby: As I understand it, what is disincentivizing repairs is the lack of a predictable mechanism for landlords to be able to recover their investments in prolonging the life of their buildings and improving the quality of life in their buildings. We aim to address that through a separate and different section of this bill.

B. Stewart: I guess I missed a thought there about the prolonging and the sustaining. Based on the threshold requirement, is there a threshold requirement, or will these be assessed holistically, on a case-by-case basis, by the RTB?

Hon. D. Eby: The nature of the arbitration process is that these are determined on a case-by-case basis, applying the evidence, as brought forward by the parties, against the legislation, as it’s set out in both the law and the regulations.

B. Stewart: We’ve raised the concerns that this is becoming too hard for landlords to cover their costs in the rental market, but it would actually deter new landlords from entering the market. How would the minister respond to that statement?

Hon. D. Eby: In our first three years of government, we registered more rental units for construction than the old government did in the previous decade. In 2020, we’d already registered more rental units for construction by July than the old government ever did in an entire year.

I’m comfortable with our current approach to encouraging and stimulating rental housing construction, and I feel that we’re striking the right balance. We’ll continue to monitor that, obviously, as we go forward. But I do not have that concern.

B. Stewart: Just a few more questions, and we’ll be done on this section. The average age of a purpose-built rental in Vancouver is over 60 years old. How does the minister envision that these changes will ensure that our aging rental stock will continue to receive adequate repairs? Or will these units be demolished instead?

Hon. D. Eby: There’s no question that some units are going to be demolished and redeveloped. But the goal of including a predictable rent-increase mechanism for landlords that invest in the longevity of their buildings, as well as some of the wording in this section that’s in front of us, is aimed at encouraging landlords and rewarding landlords that invest in their buildings to improve the quality of life — rather than the previous approach, which was to allow rent increases across the board, regardless of how a landlord managed their building.

B. Stewart: Generally speaking, does the minister believe that the province has a role in protecting older rental stock, and is this legislation aimed at doing that?

Hon. D. Eby: Yes.

B. Stewart: Maybe, perhaps, could I ask: how exactly is this Bill 7 bringing protection to that older stock?

Hon. D. Eby: By incenting landlords to invest in their buildings and giving them a predictable ability to increase rents to recover those costs, we believe that that will encourage landlords to invest in buildings and prolong the life of the buildings.

[5:20 p.m.]

B. Stewart: Will renovations only be limited to structural integrity or the safety of the building, or would a comprehensive interior renovation, like gutting the interior, qualify under this section?

Hon. D. Eby: The answer is, perhaps frustratingly for the member, potentially. It would depend on the evidence that was brought forward about the nature of the renovation, according to the test that the law lays out here.

The Chair: Shall clause 14 pass?

In my opinion, the nays had it, as indicated on the cards.

A division has been called. Pursuant to the sessional orders for the hybrid session, divisions will be held at six o’clock.

Thank you, Members. Just to be absolutely clear, consideration of this clause has been postponed until 15 minutes prior to the end of today, which is at 6:15. We will, of course, come together at six o’clock, as we normally do, for these hybrid session votes.

We’re going to continue on to clause 15 now, now that clause 14 has been postponed for a decision.

Clause 15 approved.

On clause 16.

B. Stewart: I would ask that the minister describe an example of what these changes are meant to accomplish, please.

Hon. D. Eby: Section 49 creates the ability for landlords to end tenancies for various reasons. It may not be apparent at the time whether or not the landlord is going to follow through on that purpose for ending a tenancy.

The problem is that it’s quite difficult for tenants to demonstrate, even though they’re reasonably certain that the landlord did not move a family member in or whatever. So this section reverses the onus and puts that responsibility on to the landlord to demonstrate that they did, in fact, accomplish the purpose for ending a tenancy under section 49.

[5:25 p.m.]

I note that there’s also a minor amendment, for clarity, which clarifies that a landlord must compensate a tenant if they do not begin using the rental unit for the stated purpose for ending the tenancy within a reasonable period after the effective date of the notice to end tenancy and have not used it for at least six months’ duration, unless the stated purpose is demolition.

B. Stewart: What would qualify as punishable conduct that didn’t previously?

Hon. D. Eby: There’s no change. What has changed is who needs to prove to the residential tenancy branch what has taken place on the unit. Nothing else has changed. The legal word is the onus. This section keeps the test but shifts the onus.

B. Stewart: My question was: what would qualify as punishable conduct? I’m not certain that I understood what the minister responded — his response to that. Could he repeat that or clarify that, please?

Hon. D. Eby: The same conduct as was previously prohibited by the act.

Clauses 16 and 17 approved.

On clause 18.

B. Stewart: What would be a reasonable period for establishing renovations or repairs that have been completed?

Hon. D. Eby: This is a mirror provision to section 51. There’s already a compensation framework for ending a tenancy under section 49. This one takes that compensation framework under section 49 and applies it to tenancies that are ended for renovation under the new section 49.2.

[5:30 p.m.]

It’s a mirror of that previous section, and the member will know section 49.2. It’s the one that he and all his colleagues just voted against — the one to protect people from renovictions. The compensation framework for ending a tenancy for renovation under the new section 49.2, is mirrored here in the same way that it existed previously, and still exists, under section 49.

B. Stewart: In this particular case, who must determine that the renovations have been completed?

[N. Letnick in the chair.]

Hon. D. Eby: The determination here is made by the arbitrator. The scenario that this section envisions is one in which a landlord applies to the residential tenancy branch and gets this requirement for vacant possession. The eviction notices are issued, and then it seems like, from the outside, no renovations take place. Maybe a bunch of new tenants move in, and the old tenants say: “Hold on a second. The landlord didn’t follow through in relation to renovations or repairs.”

So that tenant can make an application to the residential tenancy branch and say: “The landlord didn’t follow through on this.” That would require the landlord to attend the branch and to present evidence about why they didn’t follow through, or why they did but it may not have appeared that they did, or that maybe some issue came up and they couldn’t start on the timeline that they’d anticipated because something happened.

Then it would be the determination of the arbitrator as to whether or not that was reasonable in all the circumstances, on the evidence that was presented.

B. Stewart: Hmm. I’m getting that backwards. Thank you.

A question to the minister: is the onus on the landlord to prove that the renovations must be completed?

Hon. D. Eby: The onus is on a landlord who has not completed the renovations that they said they were going to, to explain why that has not happened.

B. Stewart: Could we, Minister, have some examples of mitigating circumstances where delays are acceptable under this section, please?

[5:35 p.m.]

Hon. D. Eby: This is aimed at issues that are beyond the landlord’s control that caused an unforeseeable delay in their renovation. So any of a long list of tragedies, both personal or financial, on the part of a landlord that could result in the best-laid plans not being followed through. Or, obviously our province, despite the pandemic, has a very active economy in many sectors, one of which is construction. So the sudden loss of a contractor that was anticipated to do some of the work or the majority of the work and the difficulty in finding replacement contractors….

There are a number of different scenarios where a landlord could be presenting information to the residential tenancy branch that despite actually intending to the do the work, for some reason they were unable to do so. It would be a fact-based determination by the arbitrator, based on the evidence presented to them about whether the delay was reasonable or not.

B. Stewart: Does this section substantially change the penalty or compensation amounts from what they were previously?

Hon. D. Eby: The only change is to reverse the onus and put it onto the landlord versus the tenant. The actual penalty amounts have not changed.

B. Stewart: Because the onus will now be on the landlord to apply or be approved for renoviction, will the RTB be responsible for auditing these claims, or will that fall to the tenant?

Hon. D. Eby: The way that this would come in front of the branch would be by a tenant making an application. There is no intention of creating some sort of audit capacity within the residential tenancy branch on this point.

Clauses 18 to 28 inclusive approved.

On clause 29.

B. Stewart: I just want a clarification on additional rent increases. Specifically, those for repairs and renovations have been lacking for several years now. Can the minister confirm that this will be enabled through this section and provide more specifics of how that will be permitted?

[5:40 p.m.]

Hon. D. Eby: The intent is to prescribe by regulation a predictable mechanism for landlords to recover some of the costs expended in terms of capital upgrades to their buildings.

B. Stewart: Will there be a financial cap on what increases can be sought through AGIs?

Hon. D. Eby: That policy work is happening right now, about whether there should be a cap, and if so, what any cap should be.

B. Stewart: Will there be a formula for determining AGIs? Can the minister share that with us today?

Hon. D. Eby: That policy work about a formula or whether there is a better approach is happening right now, and unfortunately, I don’t have details for the member about that.

B. Stewart: Could I expect that we can be briefed on that policy work when it’s complete so that we’re cognizant of what changes or policies are going to be enacted?

Hon. D. Eby: We will absolutely brief the member on the regulation.

B. Stewart: What circumstances will the minister establish for objecting to the production of records?

Hon. D. Eby: It’s important, when you’re compelling records, to provide an opportunity to the person who’s compelled to apply them to dispute or object to that demand and allow some oversight of the court, if necessary. So that is why the member sees that there.

The policy work about exactly what those procedures will be is happening currently. But it will establish a procedure for an individual that is met with a demand for records to object to providing the records and provide reasons why providing the records is problematic from their perspective.

B. Stewart: Will there be an appeal process if a party objects to the production of records under this section?

Hon. D. Eby: That is what the regulation is intended to address.

[5:45 p.m.]

B. Stewart: Minister, I know that there is a lot of likely impact from these changes in Bill 7. I do think that it’s extremely important that…. If it’s imbalanced in some way, will it be something that you’re prepared to revisit and help make the system so that it is more balanced for either side that is a participant in this particular bill?

Hon. D. Eby: One of the important benefits of some of the amendments here is that we’re going to get a much better picture about what’s happening in the rental housing market in terms of the conversion of units, renovations, and so on. That is in addition to work happening within the residential tenancy branch to improve their overall collection metrics and information about the rental housing market.

I can advise the member that absolutely, government will be continuing contact with both tenant and landlord organizations for feedback about this bill. There were mechanisms suggested by landlords and mechanisms suggested by tenant advocacy groups that were not incorporated into this bill — in our response, for example, to renovictions. So we’ll monitor it very carefully.

These are important changes meant to provide security of tenure for tenants and also encourage investment in aging buildings to preserve rental housing stock. If they’re not achieving our goals, then we’ll obviously have to revisit them. But I can assure the member that it is our intention to continue monitoring the market as well as to monitor what’s happening around rental housing unit construction in the province.

The Chair: Member, on clause 29.

B. Stewart: I just want to say I have no further questions on this bill.

The Chair: On the bill completely — all the sections? Thank you.

Clauses 29 to 39 inclusive approved.

The Chair: At this point, we will not pass the title until after the division call.

Hon. D. Eby: I move the committee recess.

The Chair: How long do you need — till 6 p.m.?

Hon. D. Eby: Yes, till 6 p.m. makes sense.

The Chair: We are in recess till 6 p.m.

The committee recessed from 5:48 p.m. to 5:59 p.m.

[N. Letnick in the chair.]

The Chair: Members, a deferred division will take place shortly on the question of whether clause 14 of Bill 7, Tenancy Statutes Amendment Act, 2021, shall pass.

I’d like to remind members participating remotely that they must now enable their video.

Pursuant to a sessional order regulating hybrid proceedings of the House, the committee stands recessed until 6:10 p.m.

The committee recessed from 6 p.m. to 6:10 p.m.

[N. Letnick in the chair.]

The Chair: Members, we will now proceed with the deferred division. The question is whether clause 14 of Bill 7, Tenancy Statutes Amendment Act, 2021, shall pass.

[6:15 p.m. - 6:25 p.m.]

Clause 14 approved on the following division:

YEAS — 56
Alexis	Anderson	Babchuk
Bailey	Bains	Beare
Begg	Brar	Chandra Herbert
Chant	Chen	Chow
Conroy	Coulter	Cullen
Dean	D’Eith	Dix
Donnelly	Dykeman	Eby
Elmore	Farnworth	Fleming
Furstenau	Glumac	Greene
Heyman	Kahlon	Kang
Leonard	Ma	Malcolmson
Mark	Mercier	Olsen
Osborne	Paddon	Popham
Ralston	Rankin	Rice
Robinson	Routledge	Routley
Russell	Sandhu	Sharma
Simons	Sims	A. Singh
R. Singh	Starchuk	Walker
Whiteside		Yao
NAYS — 27
Ashton	Banman	Bernier
Bond	Cadieux	Clovechok
Davies	de Jong	Doerkson
Halford	Kirkpatrick	Kyllo
Lee	Merrifield	Milobar
Morris	Oakes	Paton
Ross	Rustad	Shypitka
Stewart	Stone	Sturdy
Tegart	Wat	Wilkinson

Title approved.

Hon. D. Eby: I move the committee rise and report the bill complete without amendment.

Motion approved.

The committee rose at 6:26 p.m.

The House resumed; Mr. Speaker in the chair.

Report and
Third Reading of Bills

BILL 7 — TENANCY STATUTES
AMENDMENT ACT, 2021

Bill 7, Tenancy Statutes Amendment Act, 2021, reported complete without amendment, read a third time and passed.

Hon. M. Farnworth moved adjournment of the House.

Motion approved.

Mr. Speaker: This House stands adjourned until 10 a.m. tomorrow morning.

The House adjourned at 6:28 p.m.