Regulations under the Residential Tenancies Act, 2006
Ontario Regulation 256/10
Regulation - LGIC
Bill or Act:
Residential Tenancies Act, 2006
Summary of Decision:
The regulation was necessary in order to amend the rules for landlords to apply for above-guideline rent increases by excluding the Harmonized Sales Tax (HST) from eligible utility costs.
As the HST strengthens Ontario’s economic growth and tax competitiveness, creates more jobs, and provides higher incomes and better support to the public services on which people depend, this regulatory change will protect tenants from being charged twice for the HST on utilities.
Over time, landlords will recoup increased costs due to HST on utilities through the Consumer Price Index-based annual rent increase guideline, and through rents they negotiate with new tenants on turnover of rental units.
The regulation was approved on June 15, 2010, was filed on June 22, 2010 and came into effect on July 1, 2010.
April 12, 2010
Summary of Proposal:
To amend General Regulation O. Reg. 516/06 under the Residential Tenancies Act, 2006 in order to exclude the Harmonized Sales Tax from eligible utility costs with respect to applications for rent increases above the guideline.
Under the Residential Tenancies Act, 2006 (RTA), rents may be adjusted over time in three primary ways:
• rents for sitting tenants are annually adjusted by the annual rent increase guideline, which is based on the provincial Consumer Price Index;
• rents for sitting tenants may be increased above the guideline (AGI) on the basis of certain prescribed grounds, with prior approval of the Landlord and Tenant Board; and
• rents for new tenants may be freely negotiated between the landlord and tenant.
Section 126 of the RTA allows a landlord to make an application for an AGI rent increase. An AGI application can be based on one or more of the following grounds:
• an extraordinary increase in the costs of municipal taxes and charges and/or utilities;
• an increase in the operating costs related to security services; and/or
• capital expenditures.
The Ministry of Municipal Affairs and Housing is proposing to amend General Regulation O. Reg. 516/06 under the RTA in order to exclude the Harmonized Sales Tax from eligible utility costs with respect to applications for rent increases above the guideline.
Ministry of Municipal Affairs and Housing
Housing Policy Branch
777 Bay Street
Phone: (416) 585-7544
July 1, 2010