Attorney General David Eby, the minister responsible for housing, has said tenants could face the shock of a five to six per cent rent hike next year

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The province is looking at ways to shield renters from what could be the highest rent hike in two decades, amid soaring inflation that’s making life more expensive for British Columbians.

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However, critics say the NDP government has “abandoned” British Columbians who are drowning in the higher costs of groceries, gas and house prices.

Since rent increases in BC are tied to inflation, Attorney General David Eby, the minister responsible for housing, told CHEK News this week that tenants could face the shock of a five to six per cent rent hike next year.

Eby said in a statement Wednesday he is looking at ways to lessen the blow for renters.

“Canada is seeing the highest levels of inflation in decades, especially when it comes to housing costs, and we are reviewing policy options to continue to support British Columbians,” he said. “We’re doing the policy work to determine what we reasonably expect the numbers are going to look like and recognizing the situation faced by many renters that they’re barely hanging on, and also the situation faced by landlords that their costs are going up. as well.”

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In July, Eby’s ministry will determine the maximum allowable increase for 2023 based on the average consumer price index inflation rate over the previous 12 months. If the government allows landlords to increase rent by five or six per cent, that would be the biggest increase since 2004 when rents climbed by 4.6 per cent.

Canada’s annual inflation rate has soared to a 40-year high with a 7.7 per cent consumer inflation increase in May compared to the year before, according to Statistics Canada figures released Wednesday. In BC the jump rate was even higher at 8.1 per cent year over year, the highest rate among the large provinces.

The national inflation increase was the largest jump since January 1983 and up from a 6.8 per cent gain in April. The spike is coupled with gasoline prices, which in BC are 42 per cent higher than a year ago, groceries that have increased by nine per cent and housing costs that increased by eight per cent.

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“A five to six per cent increase can be extremely challenging for the vast majority of tenants in BC,” said Andrew Sakamoto, executive director of the Tenant Resource and Advisory Centre. “We’re talking about potential homelessness, potential displacement” at the extreme end of the scale, he said.

“I think Minister Eby and the provincial government have to find a way to limit a rent increase so that it doesn’t reach up to the five to six per cent level,” he said.

In July, Eby's ministry will determine the maximum allowable increase for 2023 based on the average consumer price index inflation rate over the previous 12 months.  If the government allows landlords to increase rent by five or six per cent, that would be the biggest increase since 2004 when rents climbed by 4.6 per cent.
In July, Eby’s ministry will determine the maximum allowable increase for 2023 based on the average consumer price index inflation rate over the previous 12 months. If the government allows landlords to increase rent by five or six per cent, that would be the biggest increase since 2004 when rents climbed by 4.6 per cent. Photo by Jason Payne /PNG

Sakamoto said that recent changes to the Residential Tenancy Act allow for landlords to apply for additional rent increases for things like capital expenditures for financial losses in certain circumstances, a provision some landlords could use even if the government capped increases below inflation next year.

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Hunter Boucher, director of operations for Landlord BC, said in an email the organization is expecting rent increases at the maximum allowable rate, noting the challenging conditions facing “renters and landlords.”

Most landlords are small business owners, Boucher said, many of whom are leaving the industry because of “exponentially increasing expenses” and lack of profitability.

In 2018, the NDP government made changes to the rent increase formula, tying annual rent hikes to inflation only. Previously, the BC Liberal government had set the rent increase formula at inflation plus two per cent.

The government instituted a rent freeze during the pandemic but that freeze was lifted on Jan. 1, which allowed landlords to increase rent by 1.5 per cent in 2022.

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Jill Atkey, CEO of the BC Non-profit Housing Association, said tying income assistance and the minimum wage to inflation — just like rent increases — would cushion both renters and landlords against surging costs and help keep the system “operating in a little bit more balance.”

She said inflation has been particularly challenging for some of BC’s non-profit housing sectors, where the “only source of revenue typically are rents.”

“They’re already operating on a break-even model,” she said of non-profit housing operators, many of whom may have already been cutting back on maintenance or other costs because of the pandemic rent freeze. “And if their costs go up and they’re not able to increase rents, then it does pose significant challenges.”

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Premier John Horgan said on April 21 that Finance Minister Selina Robinson, pictured here, has been directed to “bring forward initiatives to assist with inflation.”
Premier John Horgan said on April 21 that Finance Minister Selina Robinson, pictured here, has been directed to “bring forward initiatives to assist with inflation.” Photo by Jason Payne /PNG

Premier John Horgan said on April 21 that Finance Minister Selina Robinson has been directed to “bring forward initiatives to assist with inflation.”

BC Liberal finance critic Peter Milobar said Horgan has not made good on that promise.

“As the cost of groceries, gas, and housing skyrockets, people are counting on government to implement a real plan to fight inflation. But despite Premier Horgan’s promises, the NDP still hasn’t done anything to help people make ends meet or bring inflation under control,” Milobar said in a statement. “People feel abandoned by this NDP government as they are forced to cope with skyrocketing inflation with no sign of relief.”

Last week the federal government unveiled an $8.9-billion “affordability plan” to help Canadians deal with inflation which includes enhancement to the Canada Workers Benefit, giving $2,400 to low-income workers, a 10 per cent increase to Old Age Security for seniors older than 75, and a one-time $500 payment to one million Canadian renters.

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Horgan told reporters in Victoria Wednesday that Robinson will be presenting her own plan “shortly” but didn’t give a timeline, saying it’s important to avoid a “knee jerk” reaction.

Robinson said in a statement: “While the federal government and the Bank of Canada have the tools to combat inflation directly, we’re going to keep doing what we can at the provincial level. We are evaluating how we can continue to take steps to reduce cost pressures for British Columbians in the near term and as a part Budget 2023.”

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