A tariff war with the U.S. is on the horizon, and its effects on housing in Canada could look different for tenants, homeowners, and landlords.
Possible tariffs could have a big impact on buyer sentiment. Economic uncertainty could lead potential homebuyers to become more cautious and less willing to take on large debts, which could slow Canada’s housing market even further.
On the other hand, asking rents are declining across the nation. According to a new report by Rentals.ca, rents in Canada have fallen by nearly $100.
“The average asking rent for all residential properties in Canada was $2,100 in January, declining 4.4 per cent compared to a year ago to reach an 18-month low,” reads the report.
Compared to last year, notoriously expensive cities like Vancouver and Toronto saw the average price of rent drop by 5 per cent and 8 per cent, respectively. However, as economic uncertainty looms due to tariff threats, so too do worries about housing becoming more difficult and unaffordable.
We spoke to experts about what Canadian tenants shopping for other rentals or hoping to move to their first rented home can expect.
Tariff impact on the rental market in Canada
According to Lisa Hannam, editor-in-chief at MoneySense, upcoming tariffs could indirectly affect Canada’s rental market due to their economic impact, such as job loss and lower rental supply.
“It is possible that tariffs can impact rent and make it more expensive or even cheaper,” she said.
Mike Heddle, broker and team leader at Royal LePage State Realty, points out that tenant demand has been relatively low due to affordability issues and low consumer confidence caused by inflation.
“We’re in a period where we’ve seen consumer confidence decline over the last four or five months where many Canadians are just uncertain, and I think the lingering effect of imposing the factor of tariffs continues to create confusion in the marketplace,” he said.
However, tenants still face more uncertainties, even with the impact of potential tariffs and low consumer confidence.
In 2025, the rent increase in Ontario is capped at 2.5 per cent, while in BC, landlords can increase rent by 3 per cent. As a result, Victor Tran, a mortgage and real estate expert at Ratesdotca, warns tenants to always be prepared.
“It’s a good idea for tenants to always prepare for a rent increase, as many landlords are facing higher costs, including property taxes, mortgage payments, insurance costs, and maintenance and utility fees, which are often passed down to tenants,” he said.
Good time to shop for a new rental?
Lower rents provide favourable conditions for tenants looking to find the best deals, so is now the best time to move?
Heddle said it’s a great time to be a tenant because “the market is a little bit softer.”
“It’s a great time to get out and take a look,” he advised. “If yo’’re a first-time tenant leaving university or leaving home, you’ve got some choice and some selection because there seems to be a little bit of inventory for current tenants.”
But there are some things to watch out for.
Heddle pointed out that most of the drop was in high-end rentals exceeding an average monthly rent of $3,000. “It was the entry-level price points that continue to see rent rise,” he observed.
Even with the economic uncertainty that potential tariffs could create, Hannam noted that people don’t choose to move due to the economy.
“It’s more about their personal situations, such as job, job location, family and so on,” she said. “Plus, moving is costly, not just for rent but the other things that go along with it, such as movers, mail forwarding, truck rental, and more.”
Similarly, Tran warns against rushing into a rental unit due to a tariff war between Canada and the U.S.
“No one really knows what will happen if tariffs are implemented or if they will be,” he pointed out.
Landlords vs. tenants
Are you looking for the best rate? If you’ve been a model tenant, now might be the best time to speak with your landlord in hopes of a bargain.
“If you can negotiate with your landlord, it’s always a good time to negotiate. If you’re a good renter, keep the place clean, pay on time, a long-standing tenant and so on, you may have the ability to talk with your landlord,” suggested Hannam.
The likelihood of a landlord lowering rent also depends on their experience.
Heddle stated that novice investors might be more willing to negotiate favourable rents, while more experienced landlords might be more inclined to weather this current market.
However, Heddle urges tenants to be careful due to legislation and laws that prevent tenants and landlords from renegotiating rent.
“Consult with your local municipal laws or the landlord and tenant act to ensure that you know what your rights are,” he said.
