What’s a Reasonable Condo Fee Increase in Ontario?
Practical Guidance for Smarter Condominium Governance in the Sarnia and London Areas
Condo boards across Ontario regularly ask: How much should condo fees increase each year? The answer depends on inflation, reserve fund requirements, insurance costs, and long-term financial planning. In this guide, we break down what’s considered reasonable, and when higher increases are financially responsible.
At Sapphire Condominium Management, we work with condo boards across Sarnia, London, and Southwestern Ontario, managing millions in annual condominium budgets. One of the most sensitive discussions every year is the annual condo fee increase, and how to justify it clearly to owners.
The Honest Answer Most Boards Don’t Want to Say Out Loud
If you're a condo board member, you’re probably not asking this question because you're curious.
You’re asking because:
You know costs are going up.
You know an increase is needed.
And you’re worried about owner backlash.
So let’s answer it clearly.
The Baseline: Inflation Is the Floor, Not the Ceiling
In most years, a reasonable condo fee increase aligns closely with the Consumer Price Index (CPI). That typically falls in the 2–4% range during stable economic periods.
Why this matters:
Your condominium corporation purchases:
Utilities
Insurance
Contractor labour
Landscaping and snow removal
Professional services
Maintenance materials
If inflation is 3% and fees remain unchanged, your building is effectively underfunding itself by 3%. That shortfall compounds year over year.
A predictable, modest increase is far healthier than suppressing fees and facing a sudden, large jump later.
What Is a Typical Condo Fee Increase in Ontario?
Here’s a practical breakdown of the average condo fee increase in Ontario:
2–4% annually in stable years
5–8% during higher inflation cycles
10%+ only when correcting underfunded reserves or responding to major cost spikes
There is no legal cap on condo fee increases in Ontario. Increases must simply be justified by the annual budget approved by the board.
This is often misunderstood, but important.
The Bigger Truth: Stability Matters More Than the Percentage
The real measure of a “reasonable” increase isn’t the number.
It’s whether the increase is:
Predictable
Proactive
Based on actual cost projections
Aligned with your Reserve Fund Study
Clearly explained to owners
Small, steady annual increases are almost always healthier than holding fees flat for years and then imposing a 12–18% shock increase later.
Owners dislike surprises more than increases.
When Is an Increase Above CPI Justified?
There are situations where exceeding inflation is not only reasonable, it’s responsible.
1. Reserve Fund Catch-Up
If past boards underfunded reserves, today’s board may need to correct that. The Reserve Fund Study is not optional — and falling behind today creates special assessments tomorrow.
2. Insurance Spikes
Across Ontario, some condo insurance policies have jumped 15–40% in a single renewal cycle. That alone can push the budget beyond CPI.
3. Operating Deficits
If last year ended in a deficit due to unforeseen costs, the shortfall must be addressed in the new budget.
4. Major Contract Resets
Landscaping, snow removal, and trades pricing have increased significantly due to fuel and labour shortages. When contracts renew at market rates, the budget reflects it.
What Makes an Increase “Unreasonable”?
An increase becomes unreasonable when:
It’s not tied to real numbers
It’s poorly communicated
It follows years of artificial fee suppression
The board cannot explain line-item changes
Owners don’t resist math.
They resist uncertainty.
The Smarter Strategy: Consistency Over Politics
The healthiest condos in Ontario typically:
Increase fees modestly each year
Align contributions with their Reserve Fund Study
Avoid operating deficits
Avoid special assessments
Protect long-term property values
Flat fees may feel good temporarily.
Financial stability is better long term.
Final Thoughts for Boards
For most Ontario condo corporations, a 2–4% annual increase aligned with inflation is reasonable.
If you need to go higher, ensure:
The reason is data-backed.
The explanation is clear.
The long-term benefit is obvious.
The goal isn’t to avoid increases.
It’s to avoid financial instability.
Want help reviewing your condo fee cost for the coming years? Talk to our team about supporting your board.
Wanting to learn more about condo fees? Here are some other helpful articles:
How Condo Fees Are Calculated: A Guide for Board Members in Sarnia and London
How Much Should Your Condo Board Contribute to the Reserve Fund?
Frequently Asked Questions About Condo Fee Increases
Q: Is there a legal limit to how much condo fees can increase in Ontario?
No. Condo boards are required to pass a balanced budget. If projected expenses increase, fees must increase accordingly.
Q: Can owners vote against a condo fee increase?
No. Boards approve the annual budget unless governing documents state otherwise.
Q: How do we avoid a large condo fee increase later?
Small, consistent annual increases aligned with inflation and reserve studies prevent sudden double-digit jumps.