Is Canada’s Immigration System Worsening Housing Affordability?

Canada is expected to welcome 1.2 million newcomers by 2023, but in a country chronically short of housing, this could exacerbate existing affordability challenges.

On his announcement in October 2020, Immigration, Refugees and Citizenship Canada (IRCC) noted that 60% of newcomers – of which 401,000 arrived this year, 411,000 will arrive next year and 421,000 in 2023 – belong to the “economy class” , which means they’re investors, entrepreneurs, and generally wealthy individuals and families.

According to a Scotiabank report earlier this year, Canada produced the fewest housing units per 1,000 people in the G7 countries. Indeed, production units have been declining since 2016 due to population growth.

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“100,000 additional housing units would have been needed to keep the housing units / population ratio stable since 2016, which still leaves us well below the G7 average,” said the report by Jean-François Perrault of Scotiabank.

Is a sharp increase in the number of newcomers, the majority of whom are settling in Canada’s three largest cities, two of which have the highest house prices in the country, prudent given the slow pace of development?

Canada is indeed a country of immigrants – without them, especially skilled workers, the economy would invariably fail – but it is also a country of entrenched bureaucracy, which could be the main reason why the housing supply is consistently well below demand. How can she keep up when the demand keeps growing because the government is taking in more people than it can accommodate?

Richard Lyall, President of the Home Building Council of Ontario (RESCON), champions immigration, even arguing that Canada may not be bringing in enough workers to fill critical shortages. Ontario has a huge shortage of skilled workers, a problem noted by RESCON that will worsen over the next decade, but Lyall says more tradespeople means the construction industry could support construction sites more active and this would theoretically increase the number of housing units completed each year.

“We need to triple the number of skilled trades immigrants from where we are now, just to get it where it should be. We need immigrants who come with skilled trades rather than who come here to learn skilled trades, and we need to encourage them to come to Canada, ”said Lyall. “With more skilled trades, we will build more.

There is ample evidence that Canada can also easily attract immigrants with experience in the skilled trades.

“If I go to a big construction site in downtown Toronto, it’s like the United Nations and it’s a beautiful thing to see,” Lyall added.

However, there is also little evidence that the federal government is using immigration as a tool to fill gaps in sectors of the economy experiencing labor shortages, severe or not. And just because immigrants are allowed to enter Canada to work in particular fields doesn’t mean they have to stay in those jobs permanently.

“You should have a good grasp of the different needs of the economy, plan for them and integrate them,” Lyall said. “Some will find their way into different jobs, but with so many jobs in the skilled trades, and not just in construction, when those jobs aren’t filled it hurts the economy. We are investing too much in university education in the form of grants and not enough in the skilled trades. Now changes are happening [through student awareness programs] and the government has responded well to that, but these things take time, so the immediate solution is to increase the skilled trades through immigration.

Even though the number of skilled tradespeople grows enough to spur more active sites, the bureaucracy makes the difference between putting a shovel in the ground in one, maybe two, and four years.

But digitizing site plan approvals, changing zoning and even integrating a building information modeling system could speed up the process, Lyall says.

“Modernize and digitize the system,” he said. “Right now we have more things to build than we have people to build them. If they want to increase the number of people coming here, we’ll have to build more, but do the math and you’ll see that we don’t have enough people right now to do that, so how the hell are we going to do it there. ‘to come up ?

Written by
Neil sharma

Neil covered real estate for several years as a Toronto-based reporter. Prior to joining STOREYS, he was a regular contributor to the Toronto Star, Toronto Sun, National Post, Vice, Canadian Real Estate Wealth and several other publications. Do you have a real estate history? Email him at Ne[email protected]

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