Canada’s average rent saw record growth in 2023 as demand outpaced supply, while the rental vacancy rate reached a record low of 1.5 per cent, a new report shows.
Released Wednesday, the annual report from the Canada Mortgage and Housing Corp. (CMHC) said the national vacancy rate for purpose-built rental units last year was the lowest since 1988, when the organization began recording the metric. The federal housing agency uses purpose-built rentals as its representative sample.
By comparison, the vacancy rate for those units was 1.9 per cent in 2022, which at the time was the lowest rate seen in more than two decades.The national vacancy rate reflects the percentage of unoccupied and available residential units across the country.
A lower rate typically means greater competition among renters and a higher incentive for unit owners to raise their rates.
For two-bedroom condominiums up for rent, the average vacancy rate fell from 1.6 per cent in 2022 to 0.9 per cent in 2023.
“While the recent revival of rental construction has been encouraging, it was evidently not enough to ease the market and curb steep rent increases,” the report reads.
Rent outpacing inflation
Rent prices soared in most markets, consistent with the observed decline in vacancy rates.
Growth in the average rent for two-bedroom purpose built apartments accelerated “sharply” to a record eight per cent in 2023, in a jump that outpaced both inflation (4.7 per cent) and wage growth (five per cent).
That left renters paying, on average, $1,359 per month for those units last year.
That growth figure was up from the 5.6 per cent rent growth recorded in 2022 and well above the 2.8 per cent growth documented from 1990-2022.
Meanwhile, the average rent for two-bedroom condos was $2,049 in 2023, up $1,929 from the previous year. This represented a six per cent increase.
Not all markets impacted equally
Lower-income renters faced significant competition in their hunts for affordable rates. In some cities, finding affordable units was next to impossible.
For a rate to be considered affordable, it should cost less than 30 per cent of a renter household’s before-tax income, the federal housing agency said.In Vancouver, Ottawa and Toronto, the proportion of rental units considered affordable for the bottom 20 per cent of earners was “statistically zero,” the report notes.
In Edmonton, those units made up 12.7 per cent of total spaces. In Calgary, 3.1 per cent of apartments were considered affordable for low-income renters.In Montreal, 18.1 per cent of units were available at affordable rates for low-income earners. However, many of those units were either bachelor or one-bedroom units, which could be unfit for families.
As for vacancy rates, Calgary and Edmonton saw steep declines. Their vacancy rates fell from 2.7 in 2022 to 1.4 per cent in 2023, and 4.3 to 2.4 per cent over the same period, respectively.
Vancouver remained the tightest rental market in the country, with a vacancy rate of 0.9 per cent, unchanged from 2022. Ottawa’s vacancy rate also remained the same as the 2022 level, sitting at 2.1 per cent.
In Toronto, Canada’s largest city, the vacancy rate dropped from 1.6 to 1.4 per cent. Meanwhile, in Montreal, the rate fell from two per cent to 1.5 per cent.
Vancouver remains the most expensive rental market, with $2,181 being the average monthly rent for a two-bedroom purpose-built apartment, followed by Toronto, where the average rent for those units was $1,961 in 2023.
The least expensive apartments are concentrated in Quebec, exemplified by Montreal’s relatively low 2023 average two-bedroom rent of $1,096.
Immigration, other factors impacting demand
Immigration led to increased demand in the rental market in most large centres, while high interprovincial migration contributed in Alberta, CMHC said.
With net immigration to Canada trending sharply higher since 2020, there was increased pressure on the rental markets of Toronto, Montreal and Vancouver, cities that are also the destination for many international students.
In Edmonton and Calgary, the influx of interprovincial migrants — people who move from one province to another — led to increased demand.
The report suggests people are likely drawn to Alberta — at least partly — by the relatively strong employment growth in Calgary and Edmonton as well as lower home prices relative to Toronto and Vancouver.
Employment growth among young Canadians and the low affordability of homeownership also led to increased demand in the rental market overall.
OTTAWA – The New Democrats confirmed Thursday they won’t help Pierre Poilievre’s Conservatives topple the government next week, and intend to join the Bloc Québécois in blocking the Tories’ non-confidence motion.
The planned votes from the Bloc and the New Democrats eliminate the possibility of a snap election, buying the Liberals more time to govern after a raucous start to the fall sitting of Parliament.
Poilievre issued a challenge to NDP Leader Jagmeet Singh earlier this week when he announced he will put forward a motion that simply states that the House has no confidence in the government or the prime minister.
If it were to pass, it would likely mean Canadians would be heading to the polls, but Singh said Thursday he’s not going to let Poilievre tell him what to do.
Voting against the Conservative motion doesn’t mean the NDP support the Liberals, said Singh, who pulled out of his political pact with Prime Minister Justin Trudeau a few weeks ago.
“I stand by my words, Trudeau has let you down,” Singh said in the foyer outside of the House of Commons Thursday.
“Trudeau has let you down and does not deserve another chance.”
Canadians will have to make that choice at the ballot box, Singh said, but he will make a decision about whether to help trigger that election on a vote-by-vote basis in the House.
The Conservatives mocked the NDP during Question Period for saying they had “ripped up” the deal to support the Liberals, despite plans to vote to keep them in power.
Poilievre accused Singh of pretending to pull out of the deal to sway voters in a federal byelection in Winnipeg, where the NDP was defending its long-held seat against the Conservatives.
“Once the votes were counted, he betrayed them again. He’s a fake, a phoney and fraud. How can anyone ever believe what the sellout NDP leader says in the future?” Poilievre said during Question Period Thursday afternoon.
At some point after those comments, Singh stepped out from behind his desk in the House and a two-minute shouting match ensued between the two leaders and their MPs before the Speaker intervened.
Outside the House, Poilievre said he plans to put forward another non-confidence motion at the next opportunity.
“We want a carbon-tax election as soon as possible, so that we can axe Trudeau’s tax before he quadruples it to 61 cents a litre,” he said.
Liberal House leader Karina Gould says there is much work the government still needs to do, and that Singh has realized the consequences of potentially bringing down the government. She refused to take questions about whether her government will negotiate with opposition parties to ensure their support in future confidence motions.
Bloc Québécois Leader Yves-François Blanchet hasn’t ruled out voting no-confidence in the government the next time a motion is tabled.
“I never support Liberals. Help me God, I go against the Conservatives on a vote that is only about Pierre Poilievre and his huge ambition for himself,” Blanchet said Thursday.
“I support the interests of Quebecers, if those interests are also good for Canadians.”
A Bloc bill to increase pension cheques for seniors aged 65 to 74 is now at “the very centre of the survival of this government,” he said.
The Bloc needs a recommendation from a government minister to OK the cost and get the bill through the House.
The Bloc also wants to see more protections for supply management in the food sector in Canada and Quebec.
If the Liberals can’t deliver on those two things, they will fall, Blanchet said.
“This is what we call power,” he said.
Treasury Board President Anita Anand wouldn’t say whether the government would be willing to swallow the financial implications of the Bloc’s demands.
“We are focused at Treasury Board on ensuring prudent fiscal management,” she said Thursday.
“And at this time, our immediate focus is implementing the measures in budget 2024 that were announced earlier this year.”
This report by The Canadian Press was first published Sept. 19, 2024.
OTTAWA – Treasury Board President Anita Anand has been sworn in as federal transport minister at a ceremony at Rideau Hall, taking over a portfolio left vacant after Pablo Rodriguez resigned from cabinet and the Liberal caucus on Thursday.
Anand thanked Rodriguez for his contributions to the government and the country, saying she’s grateful for his guidance and friendship.
She sidestepped a question about the message it sends to have him leave the federal Liberal fold.
“That is a decision that he made independently, and I wish him well,” she said.
Prime Minister Justin Trudeau was not present for the swearing-in ceremony, nor were any other members of the Liberal government.
The shakeup in cabinet comes just days after the Liberals lost a key seat in a Montreal byelection to the Bloc Québécois and amid renewed calls for Prime Minister Justin Trudeau to step down and make way for a new leader.
Anand said she is not actively seeking leadership of the party, saying she is focused on her roles as minister and as MP.
“My view is that we are a team, and we are a team that has to keep delivering for our country,” she said.
The minority Liberal government is in a more challenging position in the House of Commons after the NDP ended a supply-and-confidence deal that provided parliamentary stability for more than two years.
Non-confidence votes are guaranteed to come from the Opposition Conservatives, who are eager to bring the government down.
On Thursday morning, Rodriguez made a symbolic walk over the Alexandra Bridge from Parliament Hill to Gatineau, Que., where he formally announced his plans to run for the Quebec Liberal party leadership.
He said he will now sit as an Independent member of Parliament, which will allow him to focus on his own priorities.
“I was defending the priorities of the government, and I did it in a very loyal way,” he said.
“It’s normal and it’s what I had to do. But now it’s more about my vision, the vision of the team that I’m building.”
Rodriguez said he will stay on as an MP until the Quebec Liberal leadership campaign officially launches in January.
He said that will “avoid a costly byelection a few weeks, or months, before a general election.”
The next federal election must be held by October 2025.
Conservative Leader Pierre Poilievre said he will try to topple the government sooner than that, beginning with a non-confidence motion that is set to be debated Sept. 24 and voted on Sept. 25.
Poilievre has called on the NDP and the Bloc Québécois to support him, but both Jagmeet Singh and Yves-François Blanchet have said they will not support the Conservatives.
Rodriguez said he doesn’t want a federal election right away and will vote against the non-confidence motion.
As for how he would vote on other matters before the House of Commons, “it would depend on the votes.”
Public Services and Procurement Minister Jean-Yves Duclos will become the government’s new Quebec lieutenant, a non-cabinet role Rodriguez held since 2019.
This report by The Canadian Press was first published Sept. 19, 2024.
— With files from Nojoud Al Mallees and Dylan Robertson
