Cory Morgan: Problems Abound in the Federal Government’s Proposal for a Renters’ Bill of Rights
Commentary
Canada’s rising cost of living has been a major concern for the Liberal government. Difficulty in making ends meet can significantly undermine support for any government, regardless of whether they are directly responsible for it.
The Trudeau administration has seemingly overlooked this issue, instead focusing on carbon taxes, social justice, and international relations. However, when individuals struggle to pay rent or afford basic necessities, concerns about climate change and global conflicts take a backseat.
Recent national polls suggest that the Liberals could face challenges in the upcoming elections, possibly falling to third or fourth place in the House of Commons. As a result, the government has finally acknowledged the urgency of addressing the housing crisis and has introduced policies to tackle it. Unfortunately, the proposed measures for renters may exacerbate the affordability issues in Canada.
However, there are several issues with the proposed legislation.
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Primarily, the regulation of residential rental markets falls within provincial jurisdiction. Each province possesses legislation governing the rights and responsibilities of tenants and landlords. While there may be room for enhancement in the existing provincial laws, it is not the federal government’s role to intervene in this matter. Despite the federal government’s assurance of collaboration with provinces to implement the new bill of rights, there is no clear indication of provincial interest in adopting federal initiatives. Most provinces are already engaged in disputes with the federal government over jurisdictional matters, making them hesitant to engage in another contentious issue.
Mandating the utilization of rental payment history for credit ratings may seem beneficial initially but carries potential pitfalls. Imposing additional record-keeping and reporting obligations on landlords can increase expenses, leading to rent hikes, even if marginal. Moreover, integrating rental payment history into credit ratings could result in unfairly low credit scores. Individuals with limited incomes or shared accommodations may face negative repercussions if a roommate defaults on rent payments, affecting everyone’s credit standing. Similarly, victims fleeing abusive partners and facing eviction may suffer from tarnished credit ratings.
Government interventions in controlling rental costs, whether through regulations or rent control, typically do not result in reduced rents. Provinces like British Columbia and Ontario, with long-standing rent control measures, still exhibit some of the highest rental rates in the country.
Owning a rental property is a substantial investment with associated risks. Landlords need to expect returns on their investments, and excessive government regulations may deter investors, prompting them to explore alternative markets. Vilifying and penalizing landlords can drive them away from the rental market, ultimately leading to a shortage of rental properties and subsequent rent hikes.
Canada’s housing crisis stems from a shortage of supply, rather than credit rating barriers or rental property regulations.
Even individuals with impeccable credit ratings from consistent rental payments may struggle to afford million-dollar homes in metropolitan areas like Toronto and Vancouver due to exorbitant prices, rather than credit constraints.
To stabilize housing prices, a substantial increase in supply or a reduction in demand is necessary. However, the current government measures focus on limiting supply while disregarding strategies to decrease demand.
The most effective way to alleviate housing demand in Canada is by reducing mass immigration rates, a policy the government remains reluctant to consider.
While the Trudeau administration acknowledges the urgency of addressing the housing crisis, the proposed Housing Bill of Rights may serve as mere political symbolism.
The opinions expressed in this article are solely those of the author and may not necessarily reflect the views of The Epoch Times.
