The rental market in Canada is competitive; according to a 2021 study, nearly 5 million households rented the home they lived in the year prior - an increase from 4.1 million only a decade earlier. Unfortunately, with more renters comes higher prices. With so many people seeking rental housing and prices rising, it’s important to be prepared.
But, how can you prepare yourself for a rent increase? And, what are your rights as a tenant? Familiarize yourself with the provincial laws regarding rent increases in Canada, as they will vary depending on your location. In Ontario, for example, landlords must give their tenants at least 90 days notice before increasing rent and can only do so once annually. Although these rules vary by province, knowing what to expect in your rental jurisdiction can help you be more prepared.
There are also many other ways you can prepare for a potential rent increase, and iCash, a leading provider of fast online loans in Canada, highlights how below. Here are some of the tips we suggest to help you get ready for a rent increase.
Understanding Rent Increases in Canada
Rising rental costs are a reality that many tenants must face. There are a variety of factors that contribute to prices rising, and understanding the reasoning behind this is important.
Market Dynamics
Market dynamics are a primary factor behind rent increases. In areas where there is a shortage of rental housing available, competition for the few units that are available drives prices up. Demand can also significantly impact monthly rent fees. When vacancy rates are low, landlords may be able to increase prices without fear of tenants leaving due to lack of supply.
The Rise in Inflation
Another factor that contributes to rent increases is inflation. As costs of living rise, landlords may pass on the increased costs to tenants as part of their lease agreement. Unfortunately, with inflation comes decreased purchasing power which can make it more difficult for tenants to manage their expenses, including monthly rent payments and other essential living expenses.
Property Maintenance Costs
Landlords may also increase rental fees if they have recently made significant repairs or improvements to the property. By increasing the cost, they are able to cover the expense of maintenance and repairs. This can, in turn, result in better quality units and amenities, which may benefit the tenant in the long run.
Preparing for a Rent Increase in Canada
If you suspect a rent increase in your future, there are several steps you can take to prepare and ensure your finances don’t suffer. First, it is important to understand Canadian rental laws that protect tenants from arbitrary or excessive rent increases. Depending on the province or territory you live in, landlords may only increase rent up to a certain percentage each year.
Below is a breakdown of rent increase limits by province in 2023:
British Columbia: A 2% cap on rent increases for 2023.
Alberta: No limit, however, a landlord can only increase the rent after 12 months have passed from either the start of the tenancy or when the last rent increase occurred.
Saskatchewan: Landlords are not allowed to increase rent on a fixed-term lease. The only exception is if both the landlord and the tenant agree to a raise when it comes into effect i.e. after the current lease term has ended.
Manitoba: The 2023 rent increase guideline is 0% effective January 1st and determined annually.
Ontario: 2.5% increase (determined annually).
Quebec: An average base increase of between 3 and 4% as set out by the Tribunal administratif du logement.
New Brunswick: 7.3% for 2023, as set out by the Residential Tenancies Tribunal.
Prince Edward Island: 0% (determined annually).
Nova Scotia: 5% increase by December 2023.
Newfoundland and Labrador: No limit on rent increases.
Yukon: up to 5% (determined annually)
Northwest Territories: No limit on rent increases.
Nunavut: up to 2% annually.
You should also check the provincial rental act in your area for more details and make sure you know what your rights as a tenant are. If your rent has increased, you may be able to negotiate with your landlord before having to worry about missing your rent payments altogether.
What to Do if Your Rent Has Increased
If your landlord increases your rent, remain calm and open to negotiation. Document the rent increase with a letter or email in which you can formally request an explanation from your landlord. This will allow you to come up with a plan to address it if necessary.
If your rent increase has taken effect, here are some things you can do to ensure you're not in a financial bind every time you make a rent payment.
1. Review Your Budget
If your budget has taken a hit due to the rent increase, you may need to adjust it in order to cover the additional costs. This may include finding new ways to earn additional income in Canada that can help you get back on track.
You can also tighten your budget to make room for increased rental costs by doing the following:
Cut back on non-essential expenses that can be easily reduced, such as dining out or cable television.
Look into utility discounts or rebates.
Consider a roommate to help cover the cost of rent each month.
Use online budgeting tools and apps to track your spending and help you stay on top of your finances.
2. Consider Negotiating
Negotiating with your landlord about a rent increase can be an uncomfortable experience. Always be respectful and professional during the conversation to present your case in the best way possible.
Here are some tips on how to successfully negotiate with your landlord:
Know the law: Research your provincial laws to know your rights as a tenant and be prepared to explain them to your landlord if necessary.
Present your case: Compile all of the information that supports your argument and provide it to your landlord. This could include any proof of financial circumstances, documents related to repairs, or other relevant matters.
Be reasonable: If you feel like the rent increase was too much, ask for a compromise such as a lower rate than originally proposed.
Be prepared (and willing) to compromise: Offer an alternative solution such as paying a higher rent if your landlord agrees to make specific changes or repairs in the rental unit.
3. Look Into Other Options
If your landlord is not willing to negotiate a reasonable rent increase, you may want to seek alternative housing options. This can include looking for a cheaper rental unit or, if relocation is an option, moving to a less expensive area that offers lower rent prices.
You could also look into rent-to-own programs or other affordable housing opportunities tailored to your specific needs. Depending on where you live, there are programs available that can help subsidize rental costs and make housing more affordable for you.
4. Seek Professional Assistance
If you're dealing with a rent increase, there are a number of resources and organizations that can help. The Canadian government provides assistance through the Canada Mortgage and Housing Corporation (CMHC), a national housing agency that provides housing-related programs and information. They offer rental subsidy programs designed to make rental units more affordable for low-income households.
You could also reach out to your local housing authority or tenant organization in your area for assistance. These groups provide advice and support on rent issues and may be able to help you negotiate a fair agreement with your landlord.
Use iCash to Help With Increasing Rent Costs
If you're faced with a rent increase, take the time to consider your options and explore different solutions that can work for your finances. With the help of the right resources, you can find a solution that works for both you and your landlord.
Even if you need fast cash to cover an upcoming rent payment, you could consider an iCash online loan. The online lender offers flexible loans for Canadians with bad credit, so you can get the money you need quickly without having to worry about a long application process. You can easily download the iCash app and get funded from anywhere in Canada
