Canada’s Growing Rent Gap Between New and Long-Term Tenants Could Hurt Productivity

The widening rent gap in Canada could slow down labour mobility and economic efficiency, according to Statistics Canada.

A recent study by the federal agency reveals that in 2021, renters who had remained in their current home for five years or more were paying, on average, 19% less than those who had relocated within the previous year. This represents a sharp increase from a 6% gap observed in 1996. The study adjusted for comparable housing and neighborhood quality.

In major urban centres such as Toronto, Vancouver, Montreal, and Ottawa, the disparity reached 18–20% in 2021. Calgary stood out with a smaller difference of just 6% between newer and older renters.

Over time, more Canadians are choosing not to move. In 2021, 42% of renters had stayed in the same unit for at least five years—up from 30% in 1996. Meanwhile, the proportion of renters who had moved in the past year declined from 30% to 20% over the same time frame.

The report suggests that this growing financial incentive to stay put may restrict not only housing mobility but also labour flexibility.

High rental costs could deter qualified workers from applying to roles that demand geographic flexibility, such as military service, the report warns. Over time, this trend may hinder the optimal allocation of human resources and drag down overall labour productivity in Canada.