The Ontario government released the rent increase guideline for 2024 on Friday afternoon. Capped at 2.5%, the guideline is “well below” the average inflation rate of 5.9%.

This guideline is based on Ontario’s Consumer Price Index and dictates the “maximum amount a landlord can increase rent during the year for most tenants without the approval of the Landlord and Tenant Board,” according to a news release from the Province. More specifically, it's in place to “help protect tenants from rising interest rates that would result in higher rent.”

Under the Residential Tenancies Act, 2.5% is the maximum that the Province can set the rent increase guideline to in any given year.

Steve Clark, Minister of Municipal Affairs and Housing, adds that this rent cap decision “builds on the historic tenant protections” outlined in the Helping Homebuyers, Protecting Tenants plan, also known as Bill 97. The Bill was passed in June and introduces a number of new protections for tenants, including the right to install portable air conditioners, increased fines for non-compliance under the Residential Tenancies Act, and a 60-day grace period that allows tenants to move back into a unit if they’ve been displaced for renovations.

While the rent increase guideline applies to the majority of rental households covered by the Residential Tenancies Act, it does not apply to units exempt from rent controls -- and more specifically, to units occupied for the first time after November 15, 2018. As well, the guideline does not apply to vacant residential units, community housing, long-term care homes, or commercial properties.

Ontario landlords wishing to implement a rent increase can typically only do so once every 12 months. In addition, in order for a rent increase to be legal, a Notice of Rent Increase must be served at least 90 days before the increase comes into effect, and official forms must be used.

Landlords with units under rent control do have the option to apply for an above guideline increase through Ontario’s Landlord and Tenant Board, but they must prove they have made substantial improvements to the rental unit that would warrant an increase, or that therehas been "an extraordinary increase in the cost for municipal taxes and charges."