I'm not sure I agree with Prairie Stash. Income tax is a huge factor, at least in the US.
It really depends on what % of the rental income is for expenses, and what your income tax bracket would be. Here's how I am looking at it. You stand to gain $5400 a year by renting (450 x 12 months) if the condo brings $1500 per month. In the US, you will pay tax on the rent minus expenses, which do not include principal repayment. So say your expenses are $500 per month. You will need to pay taxes on $1000 x 12 month, or $12000. This could be over $2000. Say you need to pay 18% - that would be 2160. That reduces your total savings from 5400 to 3240 over the course of the year.
For 3240 a year, I am not sure I would 1) lose my enjoyment of my condo and 2) take on the responsibility of a tenant. Further, there is the possibility of the rent rising annually while your mortgage likely would not if you've got a fixed rate. Another point I didn't see noted yet is utilities. Where I live, utilities like electric and heat are not usually included in the rent. If your new rent price of $1000 doesn't include everything, that also makes the move less attractive.
Except interest on the mortgage is 100% deductible...the only time in Canada you can deduct interest is rentals. The interest on the property far exceeds $500/month.
The biggest problem with my analysis is breaking out the interest/condo fees/priciple the OP summed up together as $1650/month (condo is $250, interest is $1000, principle is $400?). Thats over $1250 in expenses/month prior to insurance, advertising, travel, professional services (plumber, painter etc.), so its well under $3000 in net rental gains (since thats what left after interest and condo fees). But wait, the $400 in priciple repayment...its tax free upon selling. Don't forget it also skips a $7,000 mortgage penalty, keeping selling off the table for 2 years.
Plus lets hope the condo appreciates by 1%/year; theres $5000. Or perhaps negative if the market collapses...who knows.
Done well, it can still be the primary residence and when its time to sell; the capital gains is excluded. Designate it your primary residence until you sell; while you rent (you can't buy another place). The rule is allowed for people doing exactly what the OP proposes.
As a new rental, its terrible.
In fairness, the marginal tax rate is likely around 32%. To get a condo like that I suspect income over $50,000, putting them in the mid tier. That puts the taxes roughlyy, $500/year (assuming I missed $1500 in expenses such as insurance, advertising fees and professional maintenance - painters etc.)
Taxes aren't that onerous, $500/year isn't a deal breaker.