Holt government introduces 2 major affordability bills

Housing Minister David Hickey introduced legislation Wednesday to impose stricter limits on rent increases in New Brunswick.  (Jacques Poitras/CBC - image credit)
Housing Minister David Hickey introduced legislation Wednesday to impose stricter limits on rent increases in New Brunswick. (Jacques Poitras/CBC - image credit)

The Holt government has introduced two pieces of legislation aimed at keeping its promises to make life more affordable in New Brunswick.

The rent cap bill will limit residential rent increases to three per cent a year starting on Feb. 1, 2025.

And the repeal of the so-called "carbon cost adjustor" will shave around four cents off the per-litre price of gasoline before the end of the year.

Housing Minister David Hickey introduced the rent cap legislation Wednesday. It's expected to be debated and passed before the legislature adjourns for Christmas.

Any increases greater than three per cent that take effect before Feb. 1 will not change, including those covered by current rules that allow the spreading out of large increases over two to three years.

But the portion of any phased-in increase taking effect on Feb. 1 or later will also be capped at three per cent.

Tobin LeBlanc Haley of the New Brunswick Coalition for Tenants' Rights said a landlord's ability to increase rent at a higher rate when a new tenant moves in will still deliver shocks to rental prices. (Toronto Metropolitan University)

It's already too late for landlords to jack up rents ahead of the cap because of the existing requirement of six months' notice for increases.

"They've thought about a way to do it so we don't have landlords rushing to get in one last rent increase before the rent cap is put in place," said Tobin LeBlanc Haley of the New Brunswick Coalition for Tenants' Rights.

"That is great."

Landlords will be able to apply for increases above the three-per-cent cap, but only to a maximum of nine per cent, and only if they can show that the increases are needed because of renovations to their units.

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Willy Scholten, a board member with the New Brunswick Apartment Owners Association, said that won't be enough for landlords like him.

"We need cost control if we're going to have rent control," he said, pointing to increases in property assessments of 10 per cent or more for some owners now faced with a three-per-cent cap on what they can take in.

"There should be balance in the whole equation," he said. "Otherwise we're going to be sending a pretty negative message to rental housing providers."

Hickey told reporters he agrees on the need for balance and that's provided by measures like the planned removal of the provincial sales tax on construction costs for new apartment buildings.

New Brunswick Apartment Owners Association president Willy Scholten says that the province choosing not to eliminate PST for developers will make New Brunswick less competitive for rental project development than surrounding provinces.
New Brunswick Apartment Owners Association president Willy Scholten says that the province choosing not to eliminate PST for developers will make New Brunswick less competitive for rental project development than surrounding provinces.

Willy Scholten, a board member with the New Brunswick Apartment Owners Association, said developers will be reluctant to build new properties if they know their rental income won’t be allowed keep up with property tax increases. (Shane Fowler/CBC)

But Scholten said developers will still be reluctant to build new properties if they know their rental income won't be allowed keep up with property tax increases.

The cap will be reviewed every year and adjusted based on the inflation rate and vacancy statistics.

A landlord will be able to increase rent at a higher rate only when a new tenant moves in — something LeBlanc Haley said will still deliver shocks to rental prices.

"What that means is there will be an incentive to turn over those units in order to increase rents over and above the rent cap," she said.

Under existing legislation, landlords can increase rents only once a year and must give tenants six months' notice.

Any increase that exceeds a threshold linked to inflation — a threshold currently set at 3.8 per cent — can be phased in over two or three years.

Landlords must also apply if they want to terminate a lease and remove tenants for renovations — so-called "renovictions."

Officials say there have been 123 such applications from landlords so far this year and only nine have been approved.

The second affordability bill introduced Wednesday repeals legislation introduced by the Higgs government in 2022 in response to federal clean fuel regulations.

It added an "adjustor" clause to the Energy and Utility Board's price-setting formula so that the cost of the regulations – 4.5 cents per litre of gas this week – could be passed on to consumers.

The Progressive Conservative government said at the time that without the clause, small, locally owned gas stations would bear the brunt of the costs.

Finance Minister René Legacy released a second-quarter update for fiscal 2024-25 that projects a deficit of $92.1 million as of Sept. 30.
Finance Minister René Legacy released a second-quarter update for fiscal 2024-25 that projects a deficit of $92.1 million as of Sept. 30.

Energy Minister René Legacy says there are EUB mechanisms to protect small retailers and the new government’s priority was to help New Brunswickers. (Ed Hunter/CBC)

The Green Party said at the time the provision was designed to cater to the Irving Oil refinery in Saint John.

Energy Minister René Legacy said there are EUB mechanisms to protect small retailers, and the new government's priority was to help New Brunswickers.

"We had an opportunity to reduce the cost for consumers by four cents and we took it. That's what was available to us and we took it," he said.

Legacy said the bill will remove the adjustor from the EUB formula as soon as it becomes law, which is expected to happen before the legislature breaks for Christmas on Dec. 13.

That means gas prices could drop before Christmas.