Ontario’s Rent Increase Cap for 2023:
In Ontario, a recent announcement by the Government has set a rent increase cap of 2.5% for 2023. Each year, a rent increase guideline is established to align rent adjustments with the cost of living. The baseline is usually Ontario’s Consumer Price Index, which has been high lately. By this standard, a 5.3% rent increase would have been possible, but it’s deemed unsustainable.
Interestingly, a report by Rentals.ca reveals that among Canada’s top 25 cities with high rents, 11 are in Ontario. The average one-bedroom apartment rent is $2,219 CAD monthly. A 5.3% hike would mean an extra $117 monthly or $1,411 yearly.
The cap seeks to shield tenants from substantial rent hikes and applies to about 1.4 million rental units under the Residential Tenancies Act. But certain categories, like units occupied post-November 15, 2018, remain exempt.
Renting an Ontario apartment involves steps like finding listings through platforms such as apartments.com, rentals.ca, or condos.ca. When interested in a place, you’ll need to complete forms and provide documents like credit reports, proof of employment, and identification.
Filling OREA form 410 beforehand, containing necessary information, is a smart time-saving move. A lease will follow if a landlord approves. Expect first and last month’s rent upfront and, sometimes, a key deposit.
Reading and understanding the lease is vital; it details responsibilities for both parties. Remember, landlords can’t legally request over two months’ rent in advance.
Rent increases generally occur after 12 months. Ontario landlords aren’t mandated to raise rent, but if they do, they must provide a 90-day notice using a specific form.
Canada’s grappling with high inflation due to post-pandemic spending. Increased demand led to price surges, peaking at 8.1% in June 2022. Despite a drop, the Bank of Canada raised rates to 5% in July, citing ongoing price hikes.
The Consumer Price Index forecasts around 3% inflation for the coming year, gradually decreasing to 2% by mid-2025. Ontario’s 2.5% rent cap may change based on future inflation trends.
