Ontario is more than doubling the maximum rate a landlord can increase a tenant’s rent next year, setting the highest rent increase pattern in the province in a decade.
On Wednesday, the province announced that Ontario’s rent increase pattern for 2023 is 2.5 percent.
Previously, landlords could increase rents by 1.2 per cent in 2022, following a rent freeze that was implemented in 2020 to help Ontario residents at the start of the COVID-19 pandemic.
The last time Ontario’s rent increase guidelines reached 2.5% was in 2013.
“As Ontario households face rising cost of living, our government is providing stability and predictability to the vast majority of tenants by limiting the pattern of rising rents below inflation in the 2.5 percent, ”said Steve Clark, Minister of Municipal Affairs and Housing. a statement Wednesday.
The guideline is based on the Ontario Consumer Price Index, a measure of inflation calculated monthly by Statistics Canada that uses data that reflects the economic conditions of the past year.
This follows an unprecedented move by the Bank of Canada earlier this month, which raised 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 had coincided with recent inflation, the 2023 pattern would have risen to 5.3 per cent. “However, the guideline is limited to help protect tenants from significant rent increases,” the province said.
The new rental guideline comes after a report found that rental prices in Toronto have risen 20 percent over the past year. On average, rental prices in the city rose to $ 2,474 in May, up from $ 2,035 a year ago. This marked the largest monthly increase in rental prices since 2019, before the pandemic began.
The government says rent increases are neither automatic nor mandatory. They are the maximum amount a landlord can increase rent from tenants without the approval of the Board of Landlords and Tenants.
Landlords must notify tenants in writing at least 90 days before starting a rent increase. They must have spent at least 12 months from the first day of rent or the last increase in rent.
The 2023 rent increase is applicable between January 1 and December 31, 2023.