‘Inflationary spiral’: Rent hikes could be even higher next year as tenants pay for repairs, advocates warn

Real estate signage showing an apartment for rent is seen on Monday, May 15, 2023 in Montreal. (Christinne Muschi/The Canadian Press)

Quebec Housing Minister Caroline Proulx confirmed Wednesday that a new formula to calculate rent increases will come into effect Jan. 1, but advocates in Montreal warn they could be even higher than the 7.2 per cent average seen this year.

Though landlords, tenants and politicians all agreed the previous rent hike formula was flawed and needed to be rethought, tenants’ rights groups worry prices will keep skyrocketing.

They point to including inflation and increasing the percentage of repairs that can be charged to tenants as being problematic.

In April, former housing minister France-Élaine Duranceau laid out her proposed rules that base rent increases on the following criteria:

• An applicable base percentage for rent
• The consumer price index (CPI) for the three previous years
• Variation in municipal and school taxes
• Variation in insurance costs
• A percentage of capital expenditures

Duranceau insisted the new formula would increase predictability for both landlords and tenants and would lead to lower increases than the 5.9 base rate predicted by Quebec’s Housing Tribunal (TAL) – the highest recorded.

• READ MORE: Quebec is changing how rent increases will be calculated after hikes hit historic high

A report published last week by the Canadian Mortgage and Housing Corporation (CMHC) shows overall rents in Montreal rose 7.2 per cent in 2025, while units who turned over to a new tenant went up by an average of 17 per cent.

A revised version of the formula, which included measures for landlords to include expenses for repairs in their rent increases, was tabled in September.

Some 15,000 Quebecers signed a petition this fall calling for the formula to be rejected and reworked, but the law will go into effect as-is as of next year.

“Reforming the criteria for setting rent was necessary. The new scale simplifies the criteria and makes them easier for everyone to understand. It will contribute to a better balance in the rental market and help preserve Quebec’s housing stock,” spokesperson for landlord association CORPIQ Eric Sansoucy.

Why are some calling the formula problematic?

But Shannon Franssen, interim coordinator of the Coalition of Housing Rights Committees of Quebec (RCLALQ), says “simple doesn’t mean fair” and that the new formula will lead to “an inflationary spiral.”

She pointed to the CMHC report, which shows the last of Montreal’s affordable housing units are disappearing due to high rent increases.

“The housing minister had an opportunity to put in place a formula that would be a significant component of rent control in Quebec, and the minister has not done that. So, we’re left with this rent hike calculation formula that is as broken as it has always been,” Franssen told CTV News.

She says a major component of the CPI is taking rents into account, so “rents are going up and justify further rent increases.”

• READ MORE: ‘Affordable apartments are disappearing’: Rents in Montreal went up an all-time high in 2025, CMHC report shows

And while the base rate for increases may be lower than the 5.9 per cent estimated by the TAL for 2025, landlords will be able to tack on up to five per cent of repairs to a rent hike, which “could lead, in individual cases, to the to the rent increase being much more than it would have been in the old formula,” says Franssen.

That increase will then be included in the next year’s rent increase and so on, she adds.

Gary Saxe from Projet Genesis agrees with her and says “rents have been spiraling for years due to our rental laws.”

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“I mean, just imagine the effects of people who are on low income, you know, if you’re on welfare, if you’re a senior on full guaranteed income supplement,” he says.

“We need to see changes or homelessness will grow. Vulnerability poverty will continue to grow.”

Knowing your rights as a tenant

Saxe adds it’s more important than ever for tenants to know their rights and not be shy to enforce them – especially when it comes to refusing a rent increase. He says just because a landlord seems to be asking for the average predicted by the TAL doesn’t mean a tenant must accept, and landlords often ask for increases higher than would be accepted by the rental board.

“People think, ‘Okay, it’s 5.9 per cent, my landlord asked for only 6.2 per cent. So, okay, I’ll just accept that,’ even if had they refused and the landlord had to provide all the details, they might have gotten 3.2 per cent,” he explains.

Tenants can refuse a rent increase and remain in their apartment as long as they send their refusal within one month of receiving the request. They must also prove the landlord received the refusal, for example by sending it by registered mail.

Saxe says tenants come to Project Genesis for help dealing with rent increases, repossessions, evictions and renovictions daily and local housing groups are there to help. Every neighbourhood has one, he stresses.

Meanwhile, groups like RCLALQ and Project Genesis have been pushing for tougher rent control measures, like a rent freeze, and an increase in subsidized social housing for years, which they say fall on deaf ears.