Release: August 30, 2002

Rent Regulation in Ontario

Ontario's current rent increase guideline formula was first introduced in 1987. The formula is designed to recognize increases in the cost of operating a rental building.

The central feature of the formula is the Rent Control Index. The Rent Control Index is calculated using municipal property tax and Consumer Price Index (CPI) data, averaged over a three-year period to "smooth out" the effects of inflation.

The eight categories included in the Index calculation are:

• insurance;
• heating;
• hydro;
• water;
• municipal taxes;
• administration;
• maintenance; and
• miscellaneous costs.

Each category is weighted according to its proportion of the overall costs of operating a rental property. The Index is then incorporated into the guideline formula as follows:

(Rent Control Index x .55) + 2% = Annual Rent Increase Guideline
Annual Rent Increase Guidelines: 1975 to 2003

The following table provides historical data on rent increase guidelines for Ontario.