Rent cap will expire this year, no extension, minister says

New Brunswick is not extending the rent cap it brought in this year to protect tenants against soaring increases.

The cap that prevented rent increases higher than 3.8 per cent expires on Dec. 31. 

An amendment to the Residential Tenancy Act was introduced Thursday that would not extend the cap but would link certain rent increases to the consumer price index if challenged by a tenant. 

Jill Green, the minister responsible for housing and Service New Brunswick, said the bill would still provide protection to tenants but without dissuading developers.

Advocates favour cap

Affordable housing advocates have been calling for an extension of the rent cap since it was announced, saying tenants are not protected without it.

Before the rent cap was introduced, tenants across the province reported getting notice of rent increases as high as 55 per cent. A Statistics Canada report released in April 2021 found that rent increases in New Brunswick were the largest in Canada from March 2020 to March 2021. 

Green Party Leader David Coon said Thursday the end of the rent cap will hurt people.

"We know rent caps keep people housed," he said. "And in the absence of [a] rent cap in this market, a lot of people are going to lose their housing."

The amendment would give the Residential Tenancies Tribunal the option to spread a rent increase over two or three years, if it's more than the consumer price index. This index is a measurement of changes in the cost of living year over year, and currently shows an increase of 6.9 per cent.

This means the option to have rent spread out is only available to people with rent increases at or more than 6.9 per cent. 

Green said a landlord wouldn't be able to impose another rent increase during those two or three years.

She also said the province would monitor the rent increases coming after the cap expired.

"I hope there is not a flood of changes, but we will adapt accordingly, if we experience a higher volume [of complaints] than normal," she said.

The amendment would also give tenants 60 days to appeal their rent increase, instead of 30.

And it would limit the reasons for an acceptable increase.

Renters who have already gotten a notice of a rent increase effective on or after this coming Jan. 1 would have 60 days after the new rules come into effect to apply for a review, even if they got the increase notice months ago.

These rules would still only come into play if a tenant complains about a rent increase. The only way to challenge a rent increase would be to go to the tenant tribunal.

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 to get relief.

"It's not a restraint because the onus is not on the landlord," he said. "The onus is on the tenants. And that's the problem overall with this legislation."

All-unit rent increase not acceptable reason

The current legislation says if someone complains to the tribunal about an increase in rent, the landlord has to prove that either the new rent is "reasonable" compared to other units in the same geographical area, or that all units in the building are getting the same increase.

The amendment would remove all-unit increases as an acceptable reason, so even if all units in a building get the same rent increase, the landlord would still have to prove that the new rent is reasonable.

If the landlord can't prove the rent increase is reasonable, the tribunal can reject it.

But if the tribunal accepts the increase, the amendment would add two other possibilities: The tribunal could change the date the increase would come into effect, or spread the increase over some time, so there's no stark difference in rent from one month to the next.

How the tribunal would be able to spread the increase in rent would be decided based on the consumer price Index by Statistics Canada.

If the increase in rent is more than the index, but less than double, the increase in rent can be spread over two years, with one half of the increase in the first year and the second half in the second year

If the increase in rent is twice the consumer price index or more, the increase in rent can be spread over three years, with one third of the increase applied each year.