In response to growing concerns about rising rents, Canada’s Industry Minister François-Philippe Champagne has formally requested an investigation into possible rent-fixing practices among business owners. This research focuses on the use of YieldStar, an artificial intelligence-based pricing software developed by US company RealPage, which has been criticized for potentially manipulating rental prices in Canadian housing markets. According to a statement from Champagne, the Competition Bureau of Canada is urged to determine whether this software enables illegal coordination between landlords, potentially driving rental prices higher than market dynamics would naturally dictate.
Champagne’s call to the Competition Bureau follows an investigative report from CBC, which found that some commercial landlords may be using YieldStar to standardize and increase rents. The minister expressed his concerns in a letter to Matthew Boswell, Commissioner of the Competition Bureau, in which he stressed the importance of preventing any form of market manipulation. “I would like to draw your attention to recent revelations about possible price fixing in the rental market by landlords using technologies such as YieldStar,” Champagne said, emphasizing the need to investigate whether such technologies undermine competitive pricing.
This call for research is the latest in a series of actions taken to address concerns surrounding rental affordability in Canada. In September, Canada’s New Democratic Party (NDP) also urged the Competition Bureau to investigate RealPage’s practices following a high-profile antitrust case in the United States. The lawsuit, brought by the U.S. Department of Justice, accuses RealPage of engaging in an unlawful scheme that could lead to widespread rent increases by coordinating prices across multiple landlords. RealPage has denied any wrongdoing, according to statements to both Canadian and American media.
The letter from Champagne underlines the Canadian government’s commitment to balancing technological innovation with consumer protection. “While we support the use of new technologies, we will not tolerate technologies that aim to exploit or disempower Canadians,” Champagne wrote, signaling the government’s willingness to act if such practices are found to disadvantage tenants.
In response to Champagne’s appeal, the Competition Bureau acknowledged receipt of the letter and recognized the importance of a “thorough and complete investigation of the facts,” according to a statement from bureau representative John Power. Power confirmed that if evidence indicates a violation of the Competition Act, the Bureau will take appropriate action to enforce the law.
Concerns about housing affordability have increased across Canada, with recent data indicating rents continue to rise. A report from Rentals.ca and Urbanation highlighted a 2.1% increase in average rental prices year-over-year, marking the lowest growth rate since late 2021. Nevertheless, upward price pressure continues, especially in smaller Canadian cities where rental supply is limited. This fuels concerns that algorithmic pricing could exacerbate affordability problems in these areas.
Source: CNBC
