(Ottawa) Federal officials warned the Canadian government two years ago that a sharp increase in immigration could harm housing affordability and services, internal documents show.
Posted at 6:21 am
Nojoud Al Mallees The Canadian Press
Those documents, obtained by The Canadian Press through an information request, show Immigration, Refugees and Citizenship Canada analyzed the potential impact of immigration on the economy, housing and services as it prepared its 2023 to 2025 immigration targets.
The deputy minister, among others, was warned in 2022 that housing construction had not kept pace with population growth. “In Canada, population growth has grown faster than the number of available housing units,” we can read. “As the federal agency responsible for managing immigration, the department's policymakers must understand the disparity between population growth and housing supply and also understand how permanent and temporary immigration affect population growth.” »
Given the country's aging population, immigration accounts for almost all of Canada's population growth.
The federal government has finally decided to increase the number of permanent residents Canada admits each year to 500,000 in 2025. This means that Canada will welcome almost twice as many permanent residents in 2025 as it did in 2015.
One document shows that federal officials were aware of the pressure that high population growth would put on housing and services. “Rapid increases are putting pressure on health care and affordable housing,” officials warned. “Settlement and relocation service providers express short-term difficulties due to labor market conditions, increased standards and initiatives in Afghanistan and Ukraine. »
Housing affordability has now become a political liability for the Liberal government. The Conservatives have gained significant momentum over the past year as the party tackles affordability issues, notably avoiding the issue of immigration. These pressures forced the Liberal government to focus its efforts on housing policy and respond to the increase in international students with new rules.
Recent data shows Canada's population growth rate continues to hit records and the country is also welcoming historic numbers of temporary residents, largely thanks to international student and temporary foreign worker programs.
The country's population grew by more than 430,000 people in the third quarter of 2023, marking the fastest population growth on record since 1957. Financial analysts at academic institutions have warned that Canada's strong population growth is hurting housing affordability as demand outstrips supply.
The Bank of Canada has published a similar analysis. Toni Gravelle, deputy governor since October 2019, gave a speech last month warning that strong population growth was driving up rental costs and property prices.
Opinion polls also show that Canadians are increasingly concerned about the strain that immigration places on services, infrastructure and housing, leading to declining support for high levels of immigration.
The Liberal government has defended its immigration policy decisions, saying immigrants contribute to economic prosperity and help improve the country's demographics amid an aging population. However, amid increasing scrutiny of the Liberal government's immigration policies, Immigration Minister Marc Miller set the annual target for 2026 at 500,000 permanent residents.
Attention now turns to the sharp increase in the number of non-permanent residents. Between July and October, about three-quarters of Canada's population growth came from temporary residents, including international students and temporary foreign workers.
This trend raises concerns about companies' increasing reliance on low-wage migrant workers and the lure of international students into questionable post-secondary institutions.
Mikal Skuterud, an economics professor at the University of Waterloo in Ontario who specializes in immigration policy, says the federal government appears to have lost control of temporary migration flows. In contrast to the annual targets for permanent residents, the number of temporary residents is determined by demand for migrant workers and international students.
It is also noted that there is a connection between the targets for permanent residents and the influx of temporary residents. “To the extent that you increase the number of permanent residents and it becomes clear to migrants that you have to come here as a temporary resident in order to get permanent residency, then there is an incentive for migrants to come here and make their fortune try,” he remarked.
Professor Skuterud, a vocal critic of the federal government's immigration policy, says the Liberals have exaggerated the benefits of high immigration. He says since around 2015, when the Liberal government was first elected, the narrative has been developing in Canada that “immigration is somehow a solution to Canada's economic growth problems.”
And while Professor Skuterud says people are happy to believe this rhetoric, he notes that higher immigration doesn't do much to raise living standards as measured by gross domestic product (GDP) per capita.
Immigration, Refugees and Citizenship Canada officials agree, suggesting documents obtained by The Canadian Press. “The increase in the working-age population may have a positive impact on gross domestic product, but has little impact on GDP per capita,” they noted.