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Ontario increases amount landlords can raise rent by highest level in a decade

Ontario is more than doubling the maximum rate a landlord can raise a tenant's rent next year – marking the highest rent increase guideline in the province in a decade.

PHOTO: Stock
On Wednesday, the province announced Ontario’s rent increase guideline for 2023 is 2.5 per cent.

Previously, landlords were allowed to raise rent by 1.2 per cent in 2022, following a rent freeze that rolled out in 2020 to help Ontarians through the onset of the COVID-19 pandemic.

The last time Ontario’s rent increase guidelines reached 2.5 per cent was in 2013.

“As Ontario families face the rising cost of living, our government is providing stability and predictability to the vast majority of tenants by capping the rent increase guideline below inflation at 2.5 per cent,” Steve Clark, Minister of Municipal Affairs and Housing, said in a statement on Wednesday.

The guideline is based on Ontario’s Consumer Price Index, a measure of inflation calculated monthly by Statistics Canada that uses data that reflects economic conditions over the past year.

This follows an unprecedented move from the Bank of Canada earlier this month, increasing its key interest rate by half a percentage point to 1.5 per cent for the second time in two months.

If Ontario’s rent increase matched recent inflation, the 2023 guideline would have surged to 5.3 per cent. “However the guideline is capped to help protect tenants from significant rent increases,” the province said.

The new rent guideline comes on the heels of a report that found rent prices in Toronto rose by 20 per cent over the last year. On average, rent prices in the city rose to $2,474 in May, up from $2,035 a year ago. That marked the most substantial monthly increase in rent prices since 2019, before the pandemic began.

The government says rent increases are not automatic or mandatory. They are the maximum amount a landlord can raise a tenants’ rent without the approval of the Landlord and Tenant Board.

Landlords must give tenants at least 90 days’ written notice before pursuing a rent hike. At least 12 months must have passed since either the first day of the tenancy or the last rent increase.

The 2023 rent increase is applicable between Jan. 1 and Dec. 31, 2023.


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