Well you found a landlord in Ontario, who sadly enjoys reading such acts.
There are two sections on the document that define the rent increase. The area that marks what the new rent will be and the area that explains how the rent increase is to come about. If they put a percentage in the dollars column, they would need to put it in both in order for it to be valid (though it is frankly stupid of them to screw this up). There is a different form that outlines a decrease in the rental rate - so I would suspect (although I am not an expert) that trying to take advantage of their stupidity would not hold up with the landlord tenant board (note the "legality" of the document doesn't matter, the Act overrides it). It is your choice how you want to handle this one, but I'd point out the error, maybe see if they can push back the increase by a month (since a 90 day notification is needed). Not doing so will result in just headaches for both of you. But again, this is your call. If they are the vengeful type you could end up with a much higher increase than 2.5%, as there are ways to go over the cap, but typically the paperwork does not make it worthwhile.
Rental rates in most of Canada have been greatly lagging behind property values. Most of this I would attribute to a over-heating of the market, but I suspect rents are a bit behind (which makes sense given how leases are structured... especially in Ontario).
Also - the 2.5% increase is a maximum, but note it does not apply to all properties. Any building made after Nov 1 1991 has no rental increase cap.
