Ontario caps 2023 rent increase guideline at 2.5 per cent

By Amanda Jerome

Law360 Canada (June 29, 2022, 12:12 PM EDT) -- On June 29, the government of Ontario announced a cap of 2.5 per cent on the 2023 rent increase guideline.

“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,” said Steve Clark, minister of municipal affairs and housing, in a statement.

“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,” he added.

The rent increase guideline, a government release noted, is “the maximum amount a landlord can increase rent during the year for most tenants without the approval of the Landlord and Tenant Board.”

“The guideline is based on Ontario’s Consumer Price Index, a measure of inflation calculated monthly by Statistics Canada using data that reflects economic conditions over the past year. Due to recent inflation, this would result in a 2023 guideline of 5.3 per cent, however the guideline is capped to help protect tenants from significant rent increases,” the release added.

The release explained that the guideline “applies to the vast majority — approximately 1.4 million — of rental households covered by the Residential Tenancies Act,” but it “does not apply to rental units occupied for the first time after November 15, 2018, vacant residential units, community housing, long-term care homes or commercial properties.”

“Rent increases are not automatic or mandatory. Landlords may only raise rent if they gave tenants at least 90 days’ written notice using the correct form. In addition, at least 12 months must have passed since the first day of the tenancy or the last rent increase. If a tenant believes they have received an improper rent increase, they can apply to the Landlord and Tenant Board to request a correction,” the release added.

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