Good morning and thank you.
My name is Hans Brouillette. I am the director of public affairs and communications at CORPIQ, the largest association of landlords in Quebec. I am joined by Pascal Dubois, an energy efficiency advisor. He and his team work with owners wanting to take advantage of energy efficiency programs.
A brief will be submitted to the committee today for translation. Unfortunately, we were not able to get it done sooner because of time constraints.
Clearly, in CORPIQ's view, what we are doing today is important. We want to preserve our built heritage of rental housing units for future generations. We also want to preserve the environment through energy efficiency, as well as the well-being of families who rent in Quebec, and there are many.
CORPIQ, the largest landlord association for the past 30 years, brings together 12,000 rental property owners. We target 40,000 property owners, as well as non-members, through our publications. These owners are representative of the entire community of rental property owners in Quebec, which is made up of many small owners of small buildings and a few large owners of hundreds of units. CORPIQ is a non-profit association that provides services to landlords.
The makeup of Quebec's housing stock is very different from that of other provinces. First, it should be noted that 40% of those living in rental units in Quebec—in fact, 40% of the population, 40% of families—are tenants. That is much higher than anywhere else in the country. Landlords, the people we target or try to target in Quebec, number 277,000—so many small owners with few rental units. In fact, nine out of ten landlords own between one and five units. So we are really targeting people who are often working or retired but who do not live mainly off of rental income.
The condition of Quebec's housing stock is very worrisome. According to the 2006 census, 35% of housing units in Quebec needed renovations. According to the 2001 census, five years earlier, that figure was 30%. So it is clear that there is a growing need for renovations when it comes to rental housing units. According to the census, in 9% of cases, buildings are in need of major renovations, which provide an excellent opportunity to improve the building's energy efficiency.
CORPIQ believes that the situation is even worse than the census numbers would indicate. The census data comes from questionnaires targeting tenants. CORPIQ conducted a survey of landlords, who have a lot more information on the condition of the unit, because they know what shape the foundation is in, the heating system, the roof and so forth—information that the tenant does not have. According to our figures, 32% of units in Quebec are in need of major renovations, so one in three units.
There are major challenges to renovation, and they are unique to Quebec. You will understand why. Basically, the first challenge is Quebec's excessive rent control policy, which discourages investment in renovations. We know there are five provinces that have rent control. Quebec's measures are the most restrictive. Obviously, that discourages landlords from undertaking renovations. I will explain.
When a landlord does major renovations, he can cover the expense by transferring the cost to the tenant in the form of a rent increase. There is a problem though: over the past 30 years—since the Régie du bâtiment du Québec was created, in fact—every year, the government has cut the amount that landlords can transfer. The amount that can be transferred has decreased by 77%. Before, landlords could spend $1,000 on renovations and ask the tenant to pay an extra $10 or $11 a month. Today, 15 to 20 years later, landlords are allowed to ask the tenant for just $2.42 for every $1,000 spent on renovations. Obviously, that discourages landlords from spending money on renovations.
There is a second challenge. Quebec has a lot of small buildings. There are many small buildings with few rental housing units.
So it is harder for landlords to cover the cost of renovating buildings with three or four units, versus those with 50 or even 100 units.
The third challenge stems from the fact that investors or those who are called upon to invest in renovations are not the ones benefiting from the energy savings. Many landlords who may want to invest in improving energy efficiency say to themselves that the tenants are the ones who will really save, the ones who will benefit. Most rental housing units in Quebec have leases or rental agreements stipulating that heat is not included in the rent. Since the tenant pays for heat, the tenant is the one who will benefit from energy efficiency upgrades.
As for renovation grants and tax credits, there is a real disparity in how rental buildings are treated versus single-family homes. That is a problem for us. Significant energy savings can be achieved by rental buildings, but unfortunately they are not treated the same. Energy efficiency evaluations for buildings are more expensive than for rental buildings. I will give you another example of this disparity, the Home Renovation Tax Credit announced by the government in 2009. According to a survey we did, 77% of rental property owners who knew about the credit said they were not at all interested because it did not benefit them at all.
In light of these issues, CORPIQ has the following recommendations. The first is that the committee recommend the long-term renewal of the ecoENERGY retrofit program. The second is that the committee recommend the enhancement of the ecoENERGY retrofit program in order to improve incentives, specifically for residential rental buildings, which are numerous and which house 1,300,000 families renting in Quebec.