Canada’s rental sector is undergoing a period of uneven adjustment, as new tenant-landlord rules in Ontario take effect, immigration policy reshapes demand, and regional supply gluts and shortages pull rents in different directions across the country.
Ontario Overhauls Eviction and Arrears Rules
A second wave of amendments to Ontario’s Residential Tenancies Act took effect on September 21, following an initial round of reforms in July. Drawn from Bill 60 and Bill 97, the changes cut the N4 notice repayment window for tenants in arrears from 14 days to seven days before a landlord can file an L1 application with the Landlord and Tenant Board to begin eviction proceedings. The legislation also creates, for the first time, a statutory definition of “persistent late payment” — rent paid more than seven days after the due date on at least three separate occasions within a six-month period — giving landlords a clearer threshold to document habitual delays.
Under the revised rules, a landlord issuing an N12 notice to reclaim a unit for personal or family use with at least 120 days’ notice is no longer required to pay tenant compensation, though the eviction is presumed to be in bad faith if the intended occupant does not move in within 60 days. Tenants who want to raise separate complaints at an eviction hearing, such as maintenance failures or harassment claims, must now pay 50% of the alleged overdue rent before those issues can be introduced. Mortgage brokers say the changes affect how they assess cash-flow assumptions and rental income qualification for investor clients holding mortgage-backed rental properties in the province.
Asking Rents Diverge Between National and Toronto Markets
The regulatory shift lands alongside mixed signals on rent levels. A rental market report from Rentals.ca and Urbanation for August put the national average asking rent at $2,035, while apartment and condo rents in Toronto rose 1.6% from June to reach $2,577. The Toronto-specific increase comes even as broader indicators point to softening demand in the city’s condo segment: unsold new condo inventory in the Greater Toronto Hamilton Area hit a 35-year low in the first quarter of 2026, according to reporting cited by Canadian Mortgage Professional.
Toronto-area mortgage broker Micky Khaneka of MKG Mortgages said the challenges facing Toronto’s condo market suggest “it might be a little bit longer before that starts to be absorbed,” pointing to a slower resolution of the oversupply than some investors had hoped for.
Immigration Policy and Household Formation Reshape Rental Demand
According to RBC Economics, immigration cuts are likely to be felt more acutely in the rental space than in home ownership markets, since newcomers to Canada — particularly temporary residents — tend to live in rental housing for their first five to 10 years in the country. RBC’s mid-year housing outlook also estimates that more than 400,000 households have effectively been suppressed in Canada since 2019, as people delay moving out on their own, upsizing or downsizing, a dynamic that has kept many Canadians in rented accommodation longer than they might prefer.
At the same time, Canada Mortgage and Housing Corporation has projected the country needs up to 4.69 million new homes by 2036 to restore affordability, even as CMHC has warned that construction activity could slow, a combination that has direct implications for the pipeline of purpose-built and condo rental supply feeding the market in the coming decade.
Canadian Rental and Housing Supply Snapshot
Regional Divergence Persists Across Ownership and Rental Markets
RBC’s August analysis of Canada’s major ownership markets underscores just how uneven conditions remain — dynamics that spill over into rental supply as well. In Toronto, resales fell 1.3% on a seasonally adjusted basis in August, snapping an upward streak, while new listings were down 14% year-over-year, a steeper decline than the 2.1% drop in sales. RBC noted that depressed housing starts, particularly for condos, should continue to tighten supply structurally in the coming quarters.
Montreal, by contrast, saw new listings climb an estimated 7.1% seasonally adjusted in August, part of a gradual easing of inventory through 2026, even as affordability there remains near an all-time worst by RBC’s measure. Vancouver’s resales rose an estimated 8.5% seasonally adjusted from July alongside a 12% jump in new listings, while Calgary’s market cooled further, with resales slipping more than 9% and condo prices running 8% below year-ago levels — pressures that, alongside historically high inventory, pushed Calgary’s sales-to-new-listings ratio to 0.52, its lowest point since the pandemic.
RBC economist Rachel Battaglia’s team said this uneven regional performance reflects how trade policy uncertainty, declining populations in some markets, and structural supply dynamics are playing out differently from city to city, with confidence described as “fragile and unevenly distributed” heading into the end of the year.
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