'It’s about balance': N.B. government introduces 3 per cent rent cap to start in February

A file photo of “For Rent” signs outside a residential dwelling. (CTV Atlantic)

The New Brunswick government tabled legislation on Wednesday for a three per cent rent cap, to take effect Feb. 1, 2025.

“We’ve seen rents over the last six years in New Brunswick go up by 38 per cent,” said David Hickey, minister responsible for the New Brunswick Housing Corporation. “That’s why we’re making sure it's capped at three per cent so renters know what they’re paying next month and next year.”

A rent cap was frequently mentioned by the Liberals during the campaign as a flagship affordability measure, and promoted as an item that would happen within the first 100 days of any mandate.

Hickey said landlords would still have the ability to increase rent up to nine per cent for capital renovations, but would also have to prove to the province why the work was needed.

“It’s not to step in and put stainless steel appliances in,” said Hickey, to reporters. “It’s (for) needed renovations that are important for both the safety of the tenant but also the safety of the unit too. So we want to make sure there’s some flexibility in there that exists.”

Right now, a landlord must give tenants six-months notice ahead of any rent increase, and can only implement one rent increase every 12 months.

The former Progressive Conservative government under Blaine Higgs introduced a temporary rent cap at 3.8 per cent in 2022.

“Developers told us that having a rent cap, which limits their income, will discourage development,” said interim PC leader Glen Savoie, after Wednesday’s legislation was tabled. “So has the government asked those questions to make sure this isn’t going to have an unintended consequence or a negative effect?”

Hickey said another government promise – to remove the provincial tax on new multi-unit buildings – would help address those concerns.

“It’s about balance,” said Hickey.

The New Brunswick Apartment Owners Association said if there’s going to be rent control, there should also be other cost control measures implemented as well. Association board member Willy Scholten said property assessment increases of 10 per cent or more would only become more challenging for landlords bound by the rent cap.

“We need to make that up some way, otherwise we’re not going to be able to pay our mortgages,” said Scholten, in an interview.

ACORN New Brunswick has long argued for a permanent rent cap, but chair Nicola Tyler said there’s more to be done following Wednesday’s announcement.

“We still need to close up loopholes where landlords can use potential issues to raise rents,” said Taylor, in an interview. “And we’ve seen that happen not just across our province, but across the country.”

Taylor said “renovictions” and the practice of kicking tenants out of occupied units so a landlord’s family member continue to be common complaints heard by the organization.

Landlords in New Brunswick must apply for permission from the Tenant and Landlord Relations Office to terminate leases for planned renovations. The office said there were 53 termination requests made in 2023, with one approved. To-date this year there have been 123 termination requests made, with nine applications approved.

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