The draft regulation concerning the “Act respecting the Administrative Housing Tribunal” and the “Civil Code of Québec” proposes amendments to the criteria and methods used for fixing the rent of residential dwellings. This regulation is intended to modify the existing rules for rent determination by updating several provisions within the regulatory framework. The goal is to establish a more transparent, consistent approach for adjusting rent, ensuring that the adjustments reflect various financial and market factors.

The proposed amendments include the removal of specific definitions, such as “operating expenses,” “net income,” and “service,” which had previously been part of the regulation. These definitions were deemed unnecessary for the proper functioning of the rent-fixing process. In their place, a new definition for “Consumer Price Index” (CPI) is introduced, aligning rent adjustments with the CPI data specific to Québec, as published by Statistics Canada.

The core of the regulation focuses on how rent should be modified when a tenant’s lease ends. The tribunal tasked with adjusting rent will now consider various factors: the base percentage applicable to the rent, the variation in municipal property and service taxes, school taxes, fire and liability insurance premiums, and capital expenditures during the reference period. Additionally, any rent changes that occurred in the 12 months leading up to the end of the lease must be taken into account, ensuring that rent adjustments comply with the regulation.

The calculation of the rent increase is defined by a formula that considers the average CPI for different periods, comparing the current period with the previous one and the 12 months preceding that. If this formula yields a negative result, the rent increase is set to zero. The regulation also establishes specific guidelines for how variations in municipal property taxes, school taxes, and insurance premiums should be considered in the rent adjustment process. These variations are measured as a percentage and are applied to the rent in proportion to their impact on the dwelling in question.

Furthermore, the regulation introduces limits on how rent can be adjusted for capital expenditures. If a capital expenditure is subsidized by a reduced-interest loan, the rent increase corresponding to the expenditure is capped at the annual reimbursement amount for both capital and interest. This ensures that tenants are not unduly burdened by costs related to improvements or renovations funded through subsidized loans.

The regulation also clarifies that, in cases where new services or amenities are added to a dwelling, the associated costs can only be passed on to tenants in proportion to the rent they are paying. The adjustment for these services is calculated separately for each dwelling benefiting from the new service, accessory, or dependency, and this is to be clearly reflected in the rent calculations.

Quebec (Draft) April 16, 2025
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