The guideline, year by year
The Minister sets a guideline for each calendar year. Section 120(2) of the Residential Tenancies Act sets the formula: the percentage change in the Ontario Consumer Price Index averaged over the 12 months ending at the end of May of the previous year, rounded to one decimal — and "the guideline for a calendar year shall be not more than 2.5 per cent".
Recent guidelines, from the Government of Ontario: 2027 is 1.9%, 2026 is 2.1%, 2025 was 2.5%, 2024 was 2.5%, 2023 was 2.5%, 2022 was 1.2%, and 2021 was 0% because of the legislated rent freeze.
The guideline that applies is the one for the year the increase takes effect, not the year you serve the notice. An increase effective in 2027 uses 1.9% even if the notice goes out in 2026 — which, given the 90-day rule, most of them do.
Ninety days, in writing, on the Board's form
Section 116(1): "A landlord shall not increase the rent charged to a tenant for a rental unit without first giving the tenant at least 90 days written notice of the landlord's intention to do so."
Section 116(3) requires the notice to be "in a form approved by the Board" and to set out the intention to increase and the amount of the new rent. That form is the N1 for a guideline increase. A letter, an email or a text is not the form.
Section 116(4) is the sting: "An increase in rent is void if the landlord has not given the notice required by this section, and the landlord must give a new notice before the landlord can take the increase." A defective notice does not delay the increase — it voids it, and the 90 days start again.
Twelve months between increases
Section 119(1) allows an increase only if at least 12 months have elapsed since the last increase for that tenant in that unit, or since the day the unit was first rented to that tenant if there has been no previous increase.
The 12 months and the 90 days run together, not one after the other. Serve the N1 at least 90 days before the effective date, and set the effective date at least 12 months after the last one.
Who is exempt from the guideline
The Government of Ontario states the guideline does not apply to new buildings, additions to existing buildings, and most new basement apartments occupied for the first time for residential purposes after November 15, 2018. It also does not apply on turnover, where the landlord and a new tenant agree the rent, nor to community housing, long-term care homes or commercial property.
Exempt from the guideline is not exempt from the process. The 90-day notice under section 116 and the 12-month rule under section 119 still apply to a rent-control-exempt unit.
Above-guideline increases exist for specific reasons — capital expenditures, security services, extraordinary municipal tax increases — but they require an application to and an order from the Board under section 126. They are not something a landlord can simply decide to take.
If you get it wrong
A tenant can dispute an improper increase at the Landlord and Tenant Board within 12 months after the amount was first charged. The usual outcome of a defective notice is not a negotiation; it is the increase being void and the difference repayable.
Diarize the anniversary rather than the notice date. Most missed increases are a landlord who served on time last year and forgot that this year's 90 days start from a different day.