New Brunswick is not extending the rent cap it introduced this year to protect renters from skyrocketing increases.
The cap, which prevented rent increases of more than 3.8 percent, expires on December 31.
An amendment to the Residential Tenancies Act was introduced on Thursday that does not extend the cap, but will link the rent to certain increases to the consumer price index if a tenant challenges it.
Jill Green, the minister responsible for Housing and Services New Brunswick, said the bill would still provide protections for renters, but without deterring developers.
Advocates favor cap
Affordable housing advocates have called for an extension of the rent cap since it was announced, saying renters aren’t protected without it.
Before the rent cap was introduced, tenants across the province reported receiving notices of rent increases as high as 55 per cent. A Statistics Canada report released in April 2021 found that rents are increasing in New Brunswick were the largest in Canada from March 2020 to March 2021.
Green Party leader David Coon said on Thursday that ending the rent cap will hurt people.
“We know rent caps keep people in place,” he said. “And in the absence of [a] rent cap in this market, many people will lose their homes.”
The change will give the Rent Board the opportunity to spread a rent increase over two or three years if it is more than the consumer price index. This index is a measure of changes in the cost of living year on year, and currently shows an increase of 6.9 per cent.
This means that the option to have the rent spread is only available to people with rent increases of 6.9 per cent or more.
Green said a landlord would not be able to impose another rent increase during those two or three years.
She also said the province would monitor rent increases that come after the cap expires.
“I hope there will not be a flood of changes, but we will adapt accordingly if we experience a higher volume [of complaints] than usual,” she said.
The change will also give tenants 60 days to appeal their rent increase instead of 30 days.
And that would limit the reasons for an acceptable increase.
Tenants who have already been notified of a rent increase effective January 1 or later will have 60 days after the new rules take effect to apply for a review, even if they received the increase notice months ago.
These rules will still only come into play if a tenant complains about a rent increase. The only way to contest a rent increase would be to go to the Tenants Board.
Coon said the new measures are not a good substitute for a rent cap because tenants still have to go through bureaucratic hurdles if they want relief.
“It’s not a restraint because the burden is not on the landlord,” he said. “That’s the renters’ burden. And that’s the overall problem with this legislation.”
Increase in rent in all units not acceptable reason
Current law says that if someone complains to the court about a rent increase, the landlord must prove that either the new rent is “reasonable” compared to other units in the same geographic area, or that all units in the building get the same increase.
The change would remove all unit increases as an acceptable reason, so even if all units in a building get the same rent increase, the landlord still has to prove the new rent is reasonable.
If the landlord cannot prove that the rent increase is reasonable, the board can reject it.
But if the court accepts the increase, the amendment would add two other options: the council could change the date the increase takes effect, or spread the increase over some time so there is no significant difference in rent from one month to the next. .
How the court would be able to spread the increase in rent would be decided based on the Consumer Price Index by Statistics Canada.
If the rent increase is more than the index but less than double, the rent increase can be spread over two years with half of the increase in the first year and the other half in the second year
If the rent increase is twice the consumer price index or more, the rent increase can be spread over three years, with one third of the increase applied each year.