Introduction: Rent increases in Ontario for the year 2025 will be capped below the rate of inflation, according to an announcement made by the provincial government on Friday.

Annual Rent Increase Cap: The Ministry of Municipal Affairs and Housing released its annual rent increase cap just ahead of the long weekend. Landlords of certain properties will be restricted to increasing rents by 2.5 percent or less for the upcoming year.

Inflation Comparison: The government noted that the average rate of inflation stands at 3.1 percent, underscoring the effort to keep rent increases below this benchmark.

Affected Properties: The rent increase cap specifically applies to homes built and first occupied before November 15, 2018. The government estimates this covers the majority of rental homes in Ontario, totaling around 1.4 million units that remain under rent control measures.

Impact of Policy Changes: In 2018, the Ford government repealed previous rent control legislation, arguing it had impeded the development of new housing. Over the subsequent three years, the government claims to have witnessed the highest number of rental housing starts in over three decades.

Exempt Properties: Properties constructed after November 15, 2018, are exempt from these rent control measures. Landlords of these newer homes have discretion in setting rental increases.

Rent Increase Procedures: Under Ontario housing rules, rent increases are neither automatic nor mandatory. Landlords seeking to raise rents must provide tenants with 90 days’ written notice, and increases cannot be implemented more than once per year.

Dispute Resolution: Disputes regarding rental increases or requests to exceed the cap are mediated by the Landlord Tenant Board in Ontario.