Ontario will cap the 2023 rent increase guideline at 2.5%, less than half of what current levels of inflation dictate.
In a release, the Ministry of Municipal Affairs and Housing said the move will “help protect tenants from significant rent increases.”
The guideline is the maximum amount a landlord can increase rent during the year for most tenants without the approval of the Landlord and Tenant Board.
It’s based on Ontario’s Consumer Price Index, a measure of inflation calculated monthly by Statistics Canada. Based on recent inflation, the 2023 guideline would be 5.3%.
“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%,” said Steve Clark, minister of municipal affairs and housing.
“We continue to look for ways to make homes more attainable for hardworking Ontarians while making it easier to build more houses and rental units to address the ongoing supply crisis.”
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The rent increase guideline applies to roughly 1.4 million rental units that are covered by the Residential Tenancies Act.
However, it does not apply to rental units that were occupied for the first time after November 15, 2018, or vacant residential units.
In such situations, there is no limit to how much a landlord can raise a tenant’s rent each year, which the Advocacy Centre for Tenants Ontario says incentivizes landlords to frequently evict tenants.
In May, rents in the Greater Toronto Area saw their largest monthly increase in more than three years. The average monthly rent in the region last month was $2,327; in Toronto, it was $2,438.