When it Comes to Rent Increases, Where You Live Matters

  

Statistics Canada recently published new experimental quarterly estimates for rents form Canadian CMAs. The rent for a two-bedroom apartment as well as the annualized quarterly change was provided.  What made the news was that according to a composite measure for all CMAs “the average asking rent for a two-bedroom apartment was $2,150 in the first quarter of 2026, down 0.9% from the first quarter of 2025, when the figure was $2,170.”   Naturally, many would interpret this as rent becoming more affordable in Canada.

Indeed, “… average asking rent for two-bedroom apartments decreased in most major Canadian metropolitan areas. In the first quarter of 2026, asking rent averaged $2,660 in Toronto (-1.1%), $1,900 in Montréal (-1.6%), $3,100 in Vancouver (-2.2%) and $2,350 in Ottawa–Gatineau (Ontario part) (-5.6%). CMAs in the Prairies saw smaller declines in average asking rent, with Calgary standing at $1,900 (-1.0%) and Edmonton at $1,580 (-0.6%). In contrast, Halifax recorded growth in average asking rent, reaching $2,350, a 5.4% increase compared with the same quarter in 2025.”

While much was made of the rent decline it turns out that only about 60 percent of the CMAs saw their average rents decline between 1stQ2025 and 1stQ2026 ranging from the biggest drop at -5.9 percent for Kingston to -0.5 percent for St. Catherines.  The others were all non-negative ranging from 0 for Sherbrooke, Belleville-Quinte West and Peterborough to 9.4 percent for Saskatoon. (See figure) 

It should be noted that for those of you in northern Ontario, Thunder Bay saw an increase of 5 percent while Greater Sudbury saw an increase of 7.7 percent – the second highest rent increase nationally. Except for Winnipeg, which saw a 3.9 percent increase, the remainder of what can be termed Canada’s top ten CMAs all saw year over year declines in rents.  However, in Canada’s biggest cities, the declines were modest with Toronto declining 1.1 percent, Montreal 1.6 percent and Vancouver 2.2 percent.

However, with the average rent nationally for a two-bedroom at $2,150, affordability in Canada’s housing market is still some ways off. 

Renting in Northern Ontario-You Are Richer Than You Think

When it comes to housing markets, what gets the most attention is the affordability of single detached homes particularly in large urban centres like Toronto and Vancouver.  However, the high price of housing has boiled over into rental markets and it turns out that more Canadians are now renting than ever before.  Over half of the new households formed since 2011 are apparently renting and the greater demand is being reflected in higher rents.

So, what are rents like in the five major northern Ontario cities? Figures 1 and 2 plot the monthly rent for one and two-bedroom apartments in major northern Ontario cities from 1992 to 2017 using data from Statistics Canada.  In 1992, rent for a one-bedroom was the highest in North Bay at $510 monthly and lowest in Timmins at $451 while for a two-bedroom it was highest in Thunder Bay at $620 and lowest in Timmins at $565.  By 2017, monthly rent for a one-bedroom was highest in Sudbury at $848 followed by Thunder Bay at $779. For a two-bedroom in 2017 Sudbury was the highest at $1058 followed again by Thunder Bay at $957.

 

 

Over the period 1992 to 2017, the annual average growth rate in rents for a one-bedroom was 2.4 percent in Sudbury, 1.9 percent in Thunder Bay, 1.6 percent in North Bay, 1.8 percent in the Sault and 2.2 percent in Timmins.  Over the same period, for two-bedroom apartments, the average growth rate was 2.4 percent in Sudbury, 1.8 percent in Thunder Bay, 1.9 percent in North Bay, 1.9 percent in the Sault and 2.1 percent in Timmins. Indeed, these increases are pretty close to the inflation rate as measured by the CPI.

The results are informative – rents have gone up in all northern Ontario cities - but the pace of increase picked up after 2004.  The average annual growth rate for one-bedroom apartments in these five cities was 2 percent from 1992 to 2004 and 3 percent from 2004 to 2017. For Greater Sudbury, rent growth was especially pronounced from 2004 to 2017 with an annual average growth rate of 3.5 percent for both one and two-bedrooms.   Thunder Bay in comparison saw average annual growth of 2.5 percent for one-bedrooms and 2.6 percent for two-bedrooms.   However, this period saw Sudbury with a mining boom whereas Thunder Bay experienced the forest sector crisis.

The higher growth rates in rent since 2004 coincide with the run-up in housing prices over the same period.  Even with rent controls, as new tenants come into a rental unit, there is the opportunity to raise the rent to reflect market conditions and the market is getting tighter. As all first year economics students can tell you, the long-term impact of rent control policies is to reduce the stock of units below what they would have been.  As a result, with rising demand, rents have climbed.

However, rents in Thunder Bay and Sudbury are still quite a bit lower than Toronto based on the numbers here.  In 2017, a one-bedroom in Toronto rents out at $1194 – 41 percent more than Sudbury and 53 percent more than Thunder Bay.  A two-bedroom in Toronto in 2017 rents out at $1403 – 33 percent more than Sudbury and 47 percent more than Thunder Bay.  According to the Winter 2018 Conference Board CMA reports, in 2017, household income per capita in Toronto $47,548 compared to $48,742 in Greater Sudbury and $47,287 in Thunder Bay.  Given that average incomes in Toronto are not really that much higher than either Thunder Bay or Sudbury it stands to reason that after paying your rent you will  have a lot more disposable income left over in Thunder Bay and Sudbury relative to Toronto. This really should be getting greater play in the economic marketing of these two cities.