Ontario rent freeze expires on Jan. 1

Some Ontario tenants have begun receiving notices of rent increases next year, now that the province's yearlong provincial rent freeze is set to expire on Jan. 1.

That's when landlords of rent-controlled buildings will be allowed to raise rents up to 1.2 per cent - the maximum allowable under the provincial guideline. Landlords have to provide 90 days' notice to raise the rent for tenants that have occupied their units for 12 months or more.

The elimination of the rent freeze will likely spell harder times for those tenants who are still recovering from loss of income due to the pandemic, said Dania Majid, staff lawyer for Advocacy Centre for Tenants Ontario (ACTO).

She expects many tenants will be subject to increases because it's been a year since landlords were allowed to raise the rent.

Households that negotiated rent repayments with their landlords are already paying extra and this could mean their base rent goes up as well next year, said Majid.

They're at a point where their wages haven't gone up; their wages probably went down. They haven't fully recovered depending on which sector of the economy they're working in and now they're facing an increase in the rent even though their wages haven't increased," she said.

They're already so financially stretched and at some point that elastic is not going to stretch any more," said Majid.

Last fall Canada Mortgage and Housing Corp. found that 11 per cent of rental households in the Toronto region were in arrears. Those households owed about $55 million in rent, a third of the $150 million that was owed in rent in Canada at that time.

Minister of Municipal Affairs and Housing Steve Clark set this year's guideline increase at zero per cent last fall to help rental households during the pandemic.

Since the first COVID lockdown, most Ontario tenants have paid their rent and many landlords have set up payment plans for those who couldn't because of the pandemic, said Tony Irwin, president of the Federation of Rental Housing Providers of Ontario (FRPO).

But he said landlords have also experienced increases in operating costs, including taxes, insurance and utilities.

The rent guideline of 1.2 per cent set for 2022 by the Ontario government will help offset some of these increased costs, and for many residents, will be the first time their rent has increased since 2019," said Irwin.

He said landlords will continue to help residents struggling to pay their rent.

Non-rent controlled units - those built or occupied for the first time after Nov. 15, 2018 - are not subject to the rent increase guideline.

Rent increases in rent-controlled units are not mandatory or automatic. But landlords, who want to raise the rent above the provincial guideline, can apply to the Landlord and Tenant Board for a larger increase to help pay for major improvements or new services such as air conditioning or parking.

There is no limit to how much landlords can raise the rent if one tenant vacates and a new renter moves in.