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Canada is experiencing a rental crisis like it’s rarely seen before – if ever.

The rent component of the Consumer Price Index rose 8.2 per cent in October from a year earlier, up from 7.3 per cent in September, according to Statistics Canada figures published this week. Rent is one of the biggest contributors to Canada’s too-high inflation rate.

The Statscan figures account for all tenants, including those who, depending on the province, are covered by rent-control legislation that limits annual increases. The trouble is that when people move – either willingly or through forced means, such as evictions for renovation – they often face much steeper rents in a market that is chronically undersupplied. The average asking rent in Vancouver was about $3,200 in October; in Toronto it was roughly $2,900, according to

While rents are high in major cities, recent increases have been the biggest in Atlantic Canada. Compared with four years ago, rent CPI has jumped 28.9 per cent in New Brunswick and 26.3 per cent in Nova Scotia, the most among all provinces. Atlantic Canada has experienced a rare population boom of late, but it follows decades of tepid construction of purpose-built rental units.

Statscan changed its methodology for tracking rents in early 2019. The annual rent increase in October was the largest seen under this new method. Under the old version, rents last increased by 8 per cent in the early 1980s. From 1990 through 2018, the average annual increase was 1.5 per cent.

In a report, National Bank of Canada chief economist Stéfane Marion said there is currently one housing start for every 4.2 people entering the age-15-plus population, pointing to a massive imbalance between Canada’s immigration plans and the pace of residential construction.

“Under these circumstances, people have no choice but to bid up the price of a dwindling inventory of rental units,” he said.

Decoder is a weekly feature that unpacks an important economic chart.

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