Renting in Canada – What you need to know

Canada is traditionally a nation of homeowners, but things are changing. According to Statistics Canada, between 2011 and 2021 renter households grew at over twice the pace of owner households — and newcomers are over-represented among renters, relative to the overall population. So, while around one-third of residents in Canada live in rented accommodation, most newcomers do as well.

All this means it’s crucial for newcomers to understand how to rent accommodation in Canada, what they can afford, and where they should look for a place to call home.

In this article, we’ll outline what you need to know about renting in Canada before you sign a rental agreement, otherwise known as a lease.

What can you afford to rent in Canada?

Your monthly income will largely dictate how much you can spend on rent each month. While you may have heard of the 30% rule — that is, you should expect to spend around 30% of your net income on housing expenses — it doesn’t necessarily reflect the reality for everyone.

When you rent in Canada, take into account more than just the base costs of rent itself. How much do utilities cost? How much will you have to spend on transportation to access everything you need? These are just some of the questions that come into play when thinking about affordability.

Also keep in mind, the location of your rental property will be a contributing factor in how much it will cost to rent.

Across Canada, rent prices tend to fluctuate not only by province but by city as well. Provincially, Ontario and B.C. have the most expensive cities, while Quebec has the most affordable. In addition, smaller cities tend to be less expensive than big cities.

The neighbourhood and type of dwelling will also factor in. A basement suite further from the city centre will be much cheaper from a downtown apartment, for example. This is particularly the case in Toronto, Vancouver, and other popular urban destinations.

What’s included in rent in Canada?

When looking at rental accommodation, it’s important to know what is included in rent in Canada and what is not included. Is parking included? How about electricity, water, basic appliances, or furniture?

It turns out that rental inclusions differ significantly by destinations across Canada. So, it’s important to have a firm idea of what to expect in your destination province or city. This is particularly important for newcomers who are less likely to be familiar with local norms.

Let’s have a quick look at what is included in rent across Canada.

As you can see, most renters in Canada can expect to have appliances such as a refrigerator included, but here Quebec is an outlier with only around one-in-four renters having such appliances included in rent. Whether parking is included is close to a coin toss in the most popular destination provinces and is likely to depend on the type of dwelling. And, as a general rule furniture is not included in rent in Canada.

Types of properties to rent

In Canada, there are three broad categories of rental properties: houses and townhouses, apartments, and condos.

Houses are typically bigger and may have a yard, whereas townhouses tend to be smaller and may contain rental spaces for two or more households.

The key difference between apartments and condos is who owns the individual units. In an apartment, the owner of the building also owns each unit. In a condo, the individual units may be owned by a person or a company or the owner of the building.

Each comes with its own pros and cons. The price will vary depending on a number of factors including the city, the neighbourhood, the square footage, and what amenities are included.

How to find places for rent in Canada

If you don’t have friends or family already in the city where you wish to live, online searches can help you find leads on places to live in Canada. Just be wary of scammers and keep in mind that if a listing appears too good to be true, it probably is.

You may also consider hiring a real estate agent to look on your behalf. These agents can help you find a legitimate home in Canada before you arrive.

A brief guide to lease agreements in Canada

Housing laws are handled by provincial governments, meaning the contents of the lease may depend on the laws of the province or territory where you are moving to.

Each province and territory will have its own guidelines on landlord and tenants rights and obligations. For example, in some provinces, such as Alberta, landlords may be able to ask for a security deposit of up to one month’s rent, whereas in Quebec landlords cannot ask for such a deposit.

Generally speaking, in Canada you often sign a year-long lease that will specify your tenant rights and responsibilities, as well as that of your landlord. You may also be able to find shorter-term rentals, such as month-to-month leases, or negotiate with the landlord for a shorter lease if necessary.

Make sure to read the lease thoroughly, including the fine print, and understand what you’re signing on to.

Learn more about housing laws including your rights as a tenant on these trusted government websites:

• Alberta
• British Columbia
• Manitoba
• New Brunswick
• Newfoundland and Labrador
• Nova Scotia
• Ontario
• Prince Edward Island
• Quebec
• Saskatchewan
• Northwest Territories
• Yukon

Municipalities — so, cities and towns — may share some powers over tenant rights with the provincial government.

What you need to apply for a rental property in Canada

The documents you need to apply for a rental property largely depend on the landlord. You may need to provide proof of income, references, or even a Canadian credit history check.

In Canada, your credit score determines your credit trustworthiness. You typically need it to qualify for a loan. Foreigners who have never lived or banked in Canada before may face closed doors, simply for not having a Canadian credit history.

Scotiabank offers a solution with their StartRight™ Program for newcomers. Among other benefits, newcomers to Canada may be eligible for a credit card that will allow them to build Canadian credit without having any previous credit history. Learn more about the Scotiabank StartRight® Program.

Becoming a homeowner in Canada

Finding your perfect home may start with finding the right rental property in the right city. But, at some point you may be thinking about the long-term benefits of home ownership.

Renting gives you time to save money for a down payment on a home, if that is part of your plan.

If you are thinking about purchasing a home, book an appointment with a Scotiabank advisor to learn more about the many mortgage options available for newcomers to Canada.