Canada’s rental market is already cooling, but tariffs could complicate what happens next.
Credit: Canada Mortgage and Housing Corporation
Average asking rents have fallen 4.8 per cent over the past year, helped by new supply and slower population growth.
A new analysis from Rentals.ca and Urbanation says the effects of tariffs are only starting to work through the market, with the biggest risks tied to jobs, construction costs and future housing supply:
- The most exposed rental markets are already weakening faster. Since January 2025, rents in the 10 markets most exposed to tariffs have fallen nearly four times faster than in the 10 least-exposed markets. Oshawa stands out, with asking rents down 10.8 per cent over the past year.
- Job losses are affecting rental demand. Manufacturing payroll employment fell by 40,600 nationally in 2025. Ontario accounted for 27,200 of those losses, while employment in primary metals manufacturing dropped 18.4 per cent in a single year. The analysis says uncertainty is encouraging some renters to stay with family or roommates longer, while others are renewing leases rather than moving.
- Toronto and Vancouver face a different kind of risk. Tariff-related increases in construction costs could hit high-rise markets especially hard. Structural steel framing costs have risen 7.2 per cent since the first quarter of 2025. Toronto also recorded zero new condo launches in the first half of 2026, a first on record.
- Rental construction is carrying more of the housing pipeline. Purpose-built rental now represents more than 60 per cent of all new housing construction nationally. If higher costs push projects into delay or cancellation, starts postponed in 2026 could become missing completions in 2030 and 2031.
- Tariff exposure varies widely by city. Windsor, Hamilton, Kitchener-Cambridge-Waterloo and Brantford are exposed through autos and steel, while Saguenay and Trois-Rivières are tied to aluminum, and Prince George, Nanaimo and Kamloops to lumber. Calgary ranks highest on the tariff exposure index among cities tracked in the National Rent Report.
Shaun Hildebrand, President at Urbanation, said, “Tariffs will shape the rental market before they show up in the rent numbers,” pointing to the delayed effects on employment and construction.