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Rent Control in Canada

Rent Control in Canada

Rent control, a policy aimed at protecting tenants from skyrocketing housing costs, has been a topic of heated debate globally. In Canada, where housing affordability is a pressing concern, rent control measures play a vital role in shaping the rental market. Let's delve into the dynamics of rent control in Canada, exploring its history, impact, and ongoing discourse surrounding this policy.

Historical Overview

Rent control in Canada has roots tracing back to the early 20th century when provinces like Ontario and British Columbia implemented regulations to curb excessive rent increases during times of housing shortage, notably after World War II. However, Canada's modern era of rent control gained momentum during the 1970s and 1980s. Most provinces enacted comprehensive rent control laws, limiting how much landlords could increase rents annually.

Current State of Rent Control in Canada

Although rent control in Canada is still around, it only applies to buildings built before Nov. 15, 2018. Rent control was ultimately scrapped for modern facilities to "stimulate the construction of new rental housing." Following a rent freeze after 2020 to help Ontarians through COVID-19 difficulties, lawmakers allowed landlords to raise rent by 1.2% in 2022. Now, in 2023, lawmakers have increased that percentage to 2.5. The last time Ontario's rent increase guidelines reached 2.5% was in 2013.

Two sisters in Toronto, Yumna and Khadeja Farooq, suddenly found themselves blindsided by a monthly rent increase of $7,000. The sisters have lived in the building for three years. Still, since the new building is exempt from rent increase guidelines, the landlord can legally increase their $3,500 rent to $9,500. Since buildings constructed after 2018 don't have rent guidelines, many modern facilities have seen similar astronomical hikes in their rent levels.

Impact on Tenants and Landlords

Proponents of rent control argue that it provides stability and security for tenants, preventing abrupt and unaffordable increases in housing costs. Limiting rent hikes allows low- and middle-income families to maintain housing stability, fostering more robust communities. However, critics contend that rent control can have unintended consequences. It might discourage landlords from investing in property maintenance and renovations, leading to a decrease in the overall quality of rental units. Additionally, stringent rent control policies might dissuade real estate developers from building new rental properties, exacerbating housing shortages in high-demand areas.

The future of rent control in Canada will be a delicate balancing act. Policymakers must consider various factors, including housing supply, economic implications, and the needs of tenants and landlords. Striking a balance that ensures housing affordability without stifling property development and investment will be crucial in the coming years. As the debate evolves, finding innovative solutions and adopting flexible policies will be essential to creating a housing landscape where all Canadians can secure safe, affordable, and stable homes.

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