Provincial rent hikes are usually based on inflation, which has soared to multidecade highs
The B.C. government is considering a suppression of residential rent increases in 2023 as tenants face the prospect of outsized rent hikes that aggravate inflation troubles.
More recently, inflation has surged to multidecade highs. Statistics Canada reported last week that the annual inflation rate hit 7.7 per cent in May, the highest since 1983. In B.C., the inflation rate was 8.1 per cent. If that holds for two more months, B.C.’s maximum allowable rent increase in 2023 would be 5.4 per cent, adding to cost-of-living pressures. It would also be the largest provincial rent hike since at least 2004.
Even with limits in many jurisdictions, rental costs are accelerating. Rents have risen 4.4 per cent nationwide over the past year, among the largest increases seen since 1990, according to Statscan’s consumer price index, the main gauge of inflation. Following decades of scant construction, apartment vacancies are meagre in parts of Canada and when units are vacated and become available, landlords in most provinces can set rates where they wish.
Under New Democratic Party control, the B.C. government has previously moved to curb rental costs. Annual rent increases used to be based on inflation, plus an additional two percentage points. The B.C. NDP changed the formula so that it was based solely on inflation, starting in 2019. Mr. Dickie said rising interest rates and lower limits on rent increases could hinder the construction of purpose-built apartments. “We are certainly seeing that people are taking a very hard look at projects now,” he said.
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