Bad Policy: The Consequences of Rental Regulatory Changes & Bill 13
Submitted by: Carson Horsburgh, MNP Property Tax Services, Winnipeg, MB
Manitoba’s government recently introduced Bill 13, the Residential Tenancies Amendment Act, paired with regulatory changes described as the “largest expansion to rent controls in decades.” Lost in the political messaging is what these changes will actually mean for tenants, workers, and an economy that cannot afford another deterrent to investment.
The accompanying regulation proposes two significant changes. First, the claimable portion of capital expenses in above-guideline rent increase applications would be cut by 50%, meaning a landlord who spends $100,000 on a qualifying project could only claim $50,000. Second, the monthly rent exemption threshold would rise from $1,670 to $2,000, bringing thousands of additional units under rent control. The government’s own regulatory document acknowledges landlords will see reduced revenue as a result but characterizes the impact on financial viability as manageable. The hard data tells a different story.
Industry analysis based on roughly 80,000 rental units in Manitoba puts annual construction revenues from apartment renovations alone at $353 million. Much of this work will stop. Not because landlords choose not to maintain their buildings, but because the math will make it impossible to justify. Under the proposed changes, a typical 30-unit building requiring standard capital work such as flooring, exterior paint, roof, and foundation would generate a negative return of -1.39% on money spent. Lenders will not finance projects with negative returns. It’s not a matter of opinion, it’s a matter of basic business sense.
The government has framed this legislation as a response to an affordability crisis driven by above-guideline rent increases. That framing is not supported by evidence. Winnipeg already has some of the most affordable rents among major Canadian cities. The data exists, it is accessible, and it was presented to the government during consultation. It was ignored. Sweeping regulatory changes are being made not on the basis of facts, but on the basis of ideology, and the people who will pay the price are the most vulnerable tenants in the province.
This is the part that deserves more attention. When landlords cannot recover the cost of capital investment, they do not invest. Deferred maintenance does not affect the well-appointed units in newer buildings, it affects the older, more affordable stock in the neighbourhoods where options are limited and tenants have nowhere else to go. Roofs are nursed past their useful life, old inefficient boilers are repaired instead of replaced. Buildings in areas that need investment the most get the least of it. The tenants living in those buildings are not protected by this legislation. They are let down by it.
The introduction of Bill 13 does not arrive in isolation. This government has already rolled back the school tax rebate that provided multifamily owners with a 50% rebate on school taxes. Manitoba landlords already contend with water costs 32-42% higher than Saskatchewan and Alberta, and property taxes 15-26% higher. Over the past five years, allowable guideline increases have totalled 6.5% while CPI rose 18%. The financial environment for rental housing in Manitoba was already precarious. The proposed regulatory changes are a wrecking ball, not a lifeline.
Now add the proposed changes to land transfer tax. The 2026 budget introduces new provisions targeting bare trustee corporations, a common structure used by institutional and long-term investors in multi-family real estate. Under the proposed changes, a 2% land transfer tax would be applied to the gross asset value at the time of sale. On a $700 million portfolio, that is a $14 million charge. It sounds manageable until you account for the fact that this tax is levied on gross value, not net equity. With typical financing of 70%, the equity in that same portfolio is roughly $210 million. A $14 million tax on $210 million in equity is not a 2% burden, it is closer to 7%, applied at precisely the moment long-term risk is supposed to be rewarded. These are not the terms under which patient, disciplined capital commits to a market for a decade or more.
The contradiction at the heart of this moment is worth naming plainly. The City of Winnipeg is racing to meet housing targets tied to $122 million in federal Housing Accelerator Fund money, requiring over 14,000 new units to be permitted by the end of 2026. One level of government is spending hundreds of millions of dollars to accelerate housing supply. Another is simultaneously passing regulations and tax measures that will suppress the investment and construction activity needed to support it. You cannot build your way out of a housing crisis with one hand while discouraging investment with the other.
The downstream economic consequences extend well beyond property owners. $353 million in annual renovation work means trades, suppliers, and workers across the province. When that work stops, those jobs go with it. The government was presented with this data and proceeded anyway.
What we are seeing is not a single misguided policy, we are seeing a pattern of anti-business legislation from the current provincial government. The school tax rebate rollback. The AGI restrictions. The rent control expansion. The land transfer tax on bare trustee corporations. Each measure, viewed in isolation, can be rationalized. Viewed together, they send an explicit message to long-term investors: Manitoba is not a jurisdiction that protects value creation.
Manitoba’s current government has made transforming this province from a have-not to a have province a stated priority. Discouraging investment in one of the largest asset classes in the province, reducing construction activity, degrading rental stock quality, and eroding the municipal tax base are not steps in that direction.
Well-intentioned legislation may win votes in the short term. All Manitobans will pay the price for bad policy in the long run.
Carson Horsburgh is an AACI-accredited commercial real estate appraiser who specializes in property assessment appeals.