The B.C. government needs to follow Ontario’s lead and offer explicit protection so B.C. home renters won’t face higher rates once the harmonized sales tax comes into play this summer, New Democratic Party finance critic Bruce Ralston says.
But the province’s Housing Minister insisted there is no need to make any changes. Rich Coleman said Monday the regulations that would allow a landlord to exceed the current cap on rent increases cannot be exploited due to increased taxes.
“I would say under our present rules they would be unsuccessful, quite frankly it’s not an extraordinary expense,” Mr. Coleman said in an interview.
“There is no loophole to close in B.C.”
Last week, Ontario Premier Dalton McGuinty announced his government will close a loophole in rent regulations that would have allowed landlords to apply for rent increases above existing guidelines.
In B.C., landlords are allowed to increase rents each year by the rate of inflation plus two per cent. But under the Residential Tenancy Act, landlords can apply to go above the cap if they claim “an extraordinary increase in the operating expenses of the residential property.”
Finance Minister Colin Hansen said the increased costs to landlords ought to be accommodated within the current cap.
“The very slight increases that landlords will face because of HST can be easily accommodated within the framework that is there today,” he said.
But Mr. Ralston said he expects many of the half-million households that are rentals in B.C. could be subjected to higher rates after July 1.
Rents are not subject to the HST, but landlords are likely to seek ways to pass on costs of increased maintenance, garbage collection, security and other services, he said.
“Unless landlords are specifically prohibited from applying to pass on those costs, there will be an impact on renters,” Mr. Ralston said.
On Monday, Mr. Hansen defended plans for a government mail-out to all B.C. households promoting the HST, saying he needs to counter the misinformation being spread by critics about the tax.
“We will make sure that accurate information gets out around British Columbia to actually counter a lot of the blatant misinformation that is being spread by the New Democratic Party and their members,” he said.
Organizers of the petition to repeal the HST vowed Monday to take any government campaign to the police with a complaint under the law governing the initiative process.
“It is clear from the statements by the Minister of Finance that the intention of the government’s planned mail out is to counter statements and information by the anti-HST Initiative proponent,” campaign organizer Chris Delaney said in a letter Monday to Elections BC.
In the letter, he puts the government and Elections BC on notice that he intends to file an official complaint with the RCMP, whenever the government pamphlet lands on doorsteps.
Because the B.C. government has argued the HST deal it inked last summer with Ottawa is binding, the only purpose of a taxpayer-funded ad campaign now would be to attempt to harm the petition drive, he said.
Mr. Hansen told reporters Monday the household mailer will be similar to those delivered after budgets in the past. However, although it has been seven weeks since he tabled his last B.C. budget, he said it is still not ready to be sent out.
It is not clear that the government would be violating the law by advertising on the HST right now, but any kind of campaign will be scrutinized by Elections BC.
Because no organization has registered as an opponent of the petition, any group or individual wishing to oppose the petition “directly or indirectly” will be limited to spending $5,000 in advertising.
Nola Western of Elections BC noted that not all advertising that promotes the HST is deemed to be related to the petition. Government advertising promoting the budget, including the HST impacts on that budget, would likely avoid the restrictions.
Under the initiative process, canvassers have until July 5 to sign up 10 per cent of registered voters in each of the province’s 85 ridings on a petition calling for the tax to be repealed.
Mr. Delaney said the campaign is already nearing its target in 12 ridings just two weeks into the three-month petition drive. Those numbers have not been verified by Elections BC.