A week ago, a Montreal landlord was ordered by the Quebec rental board to pay $50,000 in damages to an artist who found herself homeless for several months after being evicted “in bad faith,” the latest effort by the tribunal to deter investors from taking advantage of the housing crisis to evict tenants and jack up rents.
“Sending a notice of eviction and then changing one’s mind is too easy for the landlord, who in so doing disturbs the social order of an exemplary regime,” said adjudicator Sophie Alain in Ainsworth c. IF Realties, 2024 QCTAL 14947. “They must be dissuaded from doing so again.”
The housing crisis is accelerating across Quebec, with rents increasing, vacancy rates falling, affordable housing in short supply, and construction stalling. The vacancy rate in Greater Montréal dropped again in 2023, from 2 per cent to 1.5 per cent, a situation compounded by increasing rent prices, up by an average of 7.7 per cent, according to a recent report by the Canada Mortgage and Housing Corporation (CMHC). Quebec City is not faring better. Its vacancy rate stands at 0.9 per cent, a 15-year low, and rent went up by 4.8 per cent. Rental markets are deemed by the CMHC to be balanced when the vacancy rate reaches three per cent.
Housing supply has struggled to keep pace with strong growth in demand, supported by record migration, employment and high homeownership costs, added the CMHC.
The Governor of the Bank of Canada, Tiff Macklem, is concerned. In a speech early this May, he underlined that renters are experiencing the biggest increase in “financial stress.”
“Renters tend to have lower incomes to start with, so they’ve got lower buffers,” said Macklem. “They’ve been particularly hard hit by inflation, food, inflation, rent inflation, as well as high interest rates. You’re seeing more indicators of stress there. That is certainly something that we need to keep an eye on.”
Against this backdrop, the Quebec government belatedly moved to address a problem it long ignored. Earlier this year, in February, the provincial government passed controversial legislation that sought to “re-establish balance between renters and landlords and increase housing supply.” Bill 31 hands “superpowers” to cities to build housing faster and adds compensation to the law when a landlord evicts a tenant.
But most contentiously Bill 31 also effectively put an end to lease transfers, a way of passing on low rents to others and ensure that landlords do not increase rents between tenants. Under the previous regime, lease transfers gave tenants the right to transfer their lease to another person, and landlords could refuse but had to prove they had serious qualms. That is no longer the case under Bill 31. Landlords can reject lease transfers for any reason, and can terminate the lease if a tenant asks to transfer it.
In remarks that proved to be prescient, Quebec housing minister France-Élaine Duranceau said last year that “you can’t use a right that isn’t yours, to assign a lease to someone else, on terms you decide when it’s not your building, The tenant who wants to do that should invest in real estate and take the risks that go with it.”
Duranceau, a former real estate agent, also dismissed proposals to increase protections for seniors. The minister maintained that Bill 31 included sufficient measures to shield people of all ages from evictions.
But facing growing pressure, Duranceau tabled a bill yesterday that would impose a three-year moratorium on certain types of evictions and increase protections for low-income senior renters.
Under Bill 65, landlords would be prevented from evicting a tenant to subdivide a dwelling, enlarge it or change its use. The bill would also extend Quebec’s law against evicting low-income seniors to cover people beginning at age 65 rather than 70. The government estimates that some 24,000 households would be protected by this new measure.
Duranceau conceded that her previous effort at revamping Quebec’s housing legislation and “all the measures [the government] put forward to increase supply and build more quickly” was “not having an immediate effect” on tenants. “The massive arrival of non-permanent immigrants,” which is putting “intense pressure” on housing, in part explains her shift, added Duranceau.
Housing experts, though, are calling on the government to do more. Quebec should also curb fraudulent repossessions and rent-control measures by introducing measures such as a registry and a rent cap.
The Quebec Bar too has jumped into the fray. Its legal clinic clinic is opening 500 additional slots for free housing consultations ahead of the traditional July 1st moving day in the province. Legal consultations will be offered in English and French, and in person at their centres in Montreal, Quebec City, Gatineau and Sherbrooke. The consultations can also be done virtually.
Bill 31 represents a step forward, according to housing advocates. But it remains, as pointed out by adjudicator Alain, that the notion of “bad faith” is flexible and evolving. “Today,” she warned, “methods for obtaining a tenant’s departure are more refined.”
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