As rents and real estate prices rise, it is becoming increasingly difficult to find affordable housing in Canada. Some believe that record-breaking immigration rates in the country are to blame for this phenomenon, but experts are not so convinced.
In fact, other factors are also contributing to increasing pressure on the housing market: high interest rates, increased construction costs and municipal bureaucracies that can slow or block construction starts.
However, to ease this pressure, the idea of determining the number of immigrants admitted to Canada each year based on the number of housing units available on the market has been floated.
This is very simple mathematics. If more families move in than there are houses for them, housing prices will rise, Conservative Party of Canada leader Pierre Poilievre said in a recent speech in Winnipeg.
Mr Poilievre gave an overview of how he would deal with immigration if his party were in power.
“We need to bring immigration numbers in line with housing construction,” he explained. The increase in immigration should not exceed the number of homes we add to the housing stock.
The Liberals also said the large number of people coming into the country is exacerbating the housing crisis.
However, real estate experts and economists argue that limiting immigration will not reduce property prices.
Another portrait
Immigration to Canada has changed significantly in recent years.
In fall 2022, the Liberal government announced its intention to increase the annual permanent immigration target. That target, set at 405,000 in 2021 and 465,000 in 2022, is now 500,000 for 2024. This number has almost doubled since 2014, when the country welcomed 260,411 immigrants.
However, permanent residents are only part of the immigration picture.
Statistics Canada recorded a total increase in Canada's population of 1,158,705 people as of July 1, 2023. This represents an increase of 2.9% in one year, the highest recorded over a 12-month period since 1957.
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Federal Minister for Immigration, Refugees and Citizenship, Marc Miller (file photo)
Photo: The Canadian Press / Sean Kilpatrick
According to this Canadian agency, 98% of this increase is due to immigration, while the rest represents a natural increase. [la différence entre les naissances et les décès].
Statistics Canada estimates there will be 2,511,437 non-permanent residents in the country at the end of 2023 – including foreign students and temporary workers – compared to 1,305,206 in fall 2021.
Houses c. households
Several real estate experts say setting immigration targets based on the number of homes built will not make housing more affordable.
David Hulchanski, a professor of housing and community development at the University of Toronto, says it's important to distinguish between households and houses because the 40 million people in Canada don't live in 40 million houses.
On average, Canadian households consist of 2.45 people, he says. Under this measure, 500,000 immigrants to Canada would require 204,000 houses for housing.
Canada Mortgage and Housing Corporation (CMHC) data released this week suggests housing construction in the country fell 7% compared to 2022. However, Mr. Hulchanski points out that there were still 223,513 housing starts last year, a sufficient number to accommodate new permanent residents.
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On average, Canadian households consist of 2.45 people. Under this measure, 500,000 immigrants to Canada would require 204,000 houses for housing.
Photo: Radio-Canada / Patrick Foucault
Mr. Hulchanski says that linking immigration to housing availability is tantamount to assuming that all immigrants have the same needs.
He notes that people who immigrate to Canada through the family reunification program are more likely to live with family members than look for their own housing.
Some immigrants come with their entire family and live together, while others are wealthier and can afford expensive housing, the University of Toronto professor adds.
The problem with linking immigrants to housing stock is that there is a difference between households and immigrants, and it is a huge inequality [entre les deux]said Mr. Hulchanski.
Immigrants vs. foreign students
David Hulchanski and other housing experts see a clear connection between non-permanent immigration and housing availability.
She said the recent increase in the number of non-permanent residents has had a significant impact on housing affordability.
In 2011, for example, the number of international students in the country was almost 240,000. In 2023, Immigration Minister Marc Miller suggested that Canada was on track to admit 900,000.
We increase demand [en logements] exponentially, says Stephen Pomeroy, a professor and housing expert at McMaster University.
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Housing Minister Sean Fraser said this week that foreign workers and international student programs are worsening the housing crisis.
Photo: The Canadian Press / Adrian Wyld
Students and temporary foreign workers don't come here to buy houses: they rent. So there is a significant impact on demand in the rental market.
Mr. Pomeroy believes annual immigration targets are being well met, but that the provincial and federal governments have lost control of the non-permanent residency programs that regulate the arrival of students and temporary foreign workers.
He believes excluding 700,000 international students from the system would ease pressure on the rental market in some places without harming universities that rely too heavily on these students' high tuition fees.
Promote immigration
“What has probably happened since the 1990s is that businesses in Canada and lobby groups have started to see immigration as a very good thing,” says Christopher Worswick, chair of economics at Carleton University.
The Canadian Chamber of Commerce also believes that it is better to build more housing than lower immigration targets.
Between trying to limit demand [en matière d’immigration] or increasing inventory to reach the number of housing units and houses we need, “I really believe the focus needs to be on increasing inventory,” says Pascal Chan, director of infrastructure and construction at the Canadian Chamber of Commerce.
For his part, David Hulchanski believes that Canada needs to help the lowest income people to reduce housing prices. To this end, he proposes increasing the share of social housing in Canada from 4% to 16%.
In his view, naming immigration as the cause of the problem and promising to reduce it to restore affordability is another way to avoid the real discussion about the need for systemic change.
Based on a report by Peter Zimonjic of CBC News