Interview with Minister Lise Thériault: an in-depth reform of the Régie du logement is essential

CORPIQ met with Lise Thériault, Minister responsible for Consumer Protection and Housing, from her Quebec City office. In the course of this pre-election period, she discussed several topics of interest to rental property owners, including the Régie du logement, which she acknowledges must be the subject of a major reform.

Interview by Maxime Labrie, Chief Editor, CORPIQ

Q. This is the third time only that there is a Minister responsible for Housing since the creation of the Régie du logement on October 1st, 1980. Such a function has existed from 1980 to 1985, then briefly from 2002 to 2003, during the housing crisis. Why?

A. These responsibilities were, most of the time, assumed by the Minister of Municipal Affairs and Land Occupancy. He had that responsibility, but notably, it was not common practice to specify it in titles. If the Prime Minister has decided to appoint a minister responsible for housing, it is because there are things to be done and because there are serious questions to be settled. Everyone agrees with that. [...] Despite all the new technologies making it possible to change things, there has been no change since the creation of the Régie du logement.

I have the privilege of being at the forefront to initiate change. It's been moving a lot since I arrived, and we are not finished. Regardless of the election campaign, I try to do everything I can to get things going. I also know very well that I did not have all the necessary time to conduct an in-depth reform, which can take years.

I was appointed in October 2017 to this department responsible for the Régie du logement, the Régie du bâtiment, the Office de la protection du consommateur, the Société d'habitation du Québec... Since I took office, I passed a bill on consumer protection, and we are in the final stages of finalizing a bill regarding the rules of the Régie du bâtiment in response to the Charbonneau Commission’s recommendations. Two omnibus bills have also been tabled recently: one, already well advanced, on consumer protection, and another one related to several housing issues. Not counting the re-developing of the AccèsLogis program... So, honestly, we cannot be more effective than what I am already doing in the field.

The cases pending (37,098) at the Régie du logement in 2014 accounted for half of the cases initiated (72,485). The total number of cases brought before the court has subsequently decreased, but the proportion of cases pending in 2017 still remained the same. How come we see no improvement?

There were 33,222 pending applications as of March 31, 2017, and as of February 28, 2018, 29,659, a -10.7% variation in less than a year. In fixing of rent-revision of rent, the number of pending cases increased from 4016 on March 31, 2017, to 2114 on February 28, 2018, a difference of -47%. There were 6617 non-payment of rent pending applications as of March 31, 2017, compared to 6224 in February 2018, a decrease of 5.9%. As for pending civil cases, there were 22,589 in March 2017, compared to 21,321 in February 2018, for a decrease of -5.6%.

Mr. Patrick Simard, the Régie du logement’s new president, made clear commitments to the Auditor General of Quebec, who tabled a report for the improvement of the Régie's efficiency. I notice a downward trend when I compare the figures between March 31, 2017, and February 28, 2018. The pilot project designed to assist landlords and tenants in reconciling makes a difference in the number of disputes resolved.

In its last budget, the government announced $500 million for the reform of the justice system in Quebec. Will the Régie du logement get its share?

My colleague, Minister of Justice [Stéphanie Vallée] is currently reflecting on how best to reform the justice system, including administrative tribunals such as the Régie du logement. One cannot think of improving the judicial system by targeting only one type of court. We must look at all courts, and it is certain that the Régie du logement will be one of the priorities in the second phase of the reform.

In regards to all that is now being done to revise the justice system, I have to take into account my colleagues’ reflection in order to determine what might be interesting and would allow us to review our ways of doing things.

In 2013-2014, the Régie du logement’s annual budget was $22 million. In 2017-2018, it was also $22 million. In current dollars, this represents a decrease of 5%. Wouldn’t the Régie deserve better?

It does not necessarily mean anything. For example, it may have been investments in the computer system made three years ago, and resulting in vacant positions not needing to be filled. That does not mean there have been cuts. Are we more efficient than in 2014? For example, is videoconferencing use preferred over moving judges around the territory? In fact, the Régie already does this because travel and hotel expenses, given the number of judges, are quite significant. The budget not increasing does not make us less efficient. On the contrary, I think that new technologies allow us to be more efficient.

You announced a pilot project focusing on conciliation to resolve disputes between landlords and tenants, and thus reduce the number of requests submitted to the Régie du logement. However, statistics show, that 61% of the cases introduced concern non-payment of rent, causes that cannot be resolved by conciliation. Do you really think that conciliation will have a significant downward effect on the number of cases introduced?

It will be first necessary to analyze the results of the pilot project. Resolving cases through conciliation frees up court time, which in return reduces waiting time. It must be said though that there were no modifications to the Régie du logement since its creation. [...] In 2016-17, we registered 87 conciliation requests. In 2017-2018, this number rose to 211 (requests for non-payment or fixing of rent excluded).

[...] We are ready for a real reflection in Quebec. [...] We are entering an election campaign, and summer is not the appropriate time to reflect. We all understand this. If I had one more year in front of me, I probably would have already invited all the main stakeholders. We get requests from both sides: tenants, concerning the right to housing, and landlords, whom in their opinion also have legitimate demands. As for myself, I'm in between. I wonder how to make everyone happy. I know how difficult it is and how utopian it may seem. For now, no one seems happy. I am not a "miracle worker", but I do know some things could be different.

As I have had the opportunity to express, and as much as I sincerely believe it too: I have absolutely no pity for the large-scale property owner of a building with water infiltrations, mould, cockroaches, or whose dwellings are a health hazard. As I have no pity either for a tenant who desecrates his dwelling and takes with him cabinets, doors, bath, and sinks as he leaves... I find it appalling! In either case, there will always be people trying to get around the laws. I would never be capable of taking a bad tenant’s defence, more so when I know there are many smallholders who have bought a duplex or a triplex as a pension fund. I am very sensitive to the claims of these smallholders because there are many in my riding of Anjou-Louis-Riel (Montreal). There are many owners occupying duplexes or triplexes also. I hear their requests as well. But there is so much to do in terms of accessibility to property ownership, the maintenance of our housing stock...

Shouldn’t we encourage the reduction of cases at the Régie du logement upstream, in particular by authorizing the security deposit? Moreover, according to CORPIQ’s survey conducted amongst 1,400 property owners, a majority of them would not go to court for one or two unpaid rents if they had the option of safe-keeping a deposit equivalent to one month.

I have to set some time aside to 'get my mind around this', because I have no idea what is happening elsewhere, in other jurisdictions. In an ideal world, everyone would have enough money in their bank account to provide for themselves for three months. But we are not in an ideal world. There are certainly some cases that should not end up at the Régie du logement. I am referring in particular to those retirement homes rent increases cases. Would a security deposit avoid litigation before the Régie? Honestly, I am not there yet, as it is too soon since I am in function. For the moment, my concern is maintaining balance: I have the obligation to remain equitable between owners and tenants. I have to evaluate the interests of both parties, and that's what I'm trying to do. It's my role as a legislator.

Our housing stock is ageing. Shouldn’t the current fixing of rent criteria be increased to encourage property owners to renovate? With the current criteria, a property owner who decides to renovate a building will need nearly 42 years to recover the entire expense.

Fixing of rent criteria should be reviewed, like everything else. The criteria have not been reviewed since the creation of the Régie du logement. But we cannot just only review the criteria for fixing of rent. There are new phenomena to consider also. In the 1970s, most buildings were new. Today, we have an ageing housing stock. We must take care of it. What is true for the buildings that belong to the government under the responsibility of the Société de l'habitation du Québec, and the cooperatives, and the HLMs is also true for the real estate stock in general. We cannot just review the fixing of rent criteria, for it is not enough. We must also review the mode of operation... And that requires a deeper reflection. We must take the time. [...]

Social housing is amongst the serious issues to be settled. It cannot be overlooked in Quebec. We always have developed some and, as such, we will continue to do so. There is also the question of condominiums. Rules have not evolved since the arrival of condos, especially regarding the contingency fund, responsibilities... There are people living in condos with a tenant mentality. They do not want to pay for renovations. But if the contingency fund is at zero, good luck to resell! I own two condos; one in Quebec, one in Anjou, where we redid the roofing, the brickwork, the balconies... We renovated everything! But since our contingency fund was at zero, we paid through special contributions. In contrast, the contingency fund for my condo in Quebec is at its maximum. I will not have any problems the day I want to sell, because the fund is well stocked.

There is also the question of access to property ownership. People sell their property to move into a condo or a large seniors' residence. All questions, including those concerning rental property owners, must be analyzed. There is nothing that has been reviewed in the last 30, 40 years. The Prime Minister has appointed a Minister responsible for Housing to identify the right priorities. There will certainly be future election commitments.

Furthermore, we must not forget that if an owner sells his building one day, he will make a profit. It is not a sin to make money, it is even all right because that money is the nest egg or the pension fund for many of them. But I think we need to find solutions in order for property owners to renovate. [...] A property is the most valuable asset. This is precisely why we must supervise everything being done in terms of building inspections. It affects everyone, both small-scale property owners and those wanting to access to property ownership. The seal of building inspectors must have value so that the buyers have no surprises. It is sure that a property that has been well maintained, notwithstanding what can be asked for in terms of rent increase, has an added value.

Nothing has changed when you look at today's regulation. Neither how the Régie du logement operates nor with the base to establish the criteria for fixing of rent. Some might also say that nothing has changed with respect to tenants' rights. To make changes, all components of housing must be taken into account. One needs to have an overview.

As Minister responsible for Housing, I am seeking for solutions. I work with MAMOT (Ministry of Municipal Affairs, Regions and Land Occupancy), with the Ministry of Labour, Employment and Social Solidarity, for the Régie du bâtiment, with the Consumer Protection Bureau and, for condominium regulations, with the Department of Justice. I repatriated files from all over in order to be able to create a consolidation. Because we cannot have a housing and property ownership policy without being responsible for all the files. This is why all files have been repatriated in order for us to acquire a policy in conjunction with land occupancy. Because realities are different in a city dwelling than in region.

Having a ministry responsible for all matters related to housing helps to coordinate the work of all stakeholders: the home adaptation program, the energy efficiency improvement program, the building regulations of the Régie du bâtiment du Québec... Everyone has to work together. The Régie du logement, as an administrative tribunal operating in parallel, must also be coherent.

Shouldn’t we prioritize helping households rather than financing the construction of social and affordable housing?

I think we need to do three things: to continue developing social and affordable housing because the population is ageing and the indexation of pensions does not necessarily follow the cost of living. In small villages, for example, it takes social and affordable housing to allow seniors to stay within their communities. We must also be able to count on the rent supplement program for the private market, especially in places where the urban fabric is fully developed, and where it has become very difficult to build new buildings. Finally, access to homeownership must be promoted to allow people with lower incomes, the young families, to leave their apartments to buy property.

We must hold on to a coherent vision which stands by itself. It takes a bit of everything: social housing, rental property owners and incentives to facilitate access to property ownership. We need balance. We must ensure that what we build meets tomorrow’s standards, within the context of an ageing society.