Demographic Shock Exacerbates Affordable Housing Crisis, National Bank Says

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The “demographic shock” of mass immigration is aggravating Canada’s affordable housing problem, the National Bank of Canada said in a new report.

The working-age population—people aged 15 and older—increased by more than 100,000 in April alone, bringing total growth to more than 410,000 in the first four months of 2024, according to the May 15 “Hot Charts“ published by National Bank Financial, Inc. (NBF), a subsidiary of the National Bank of Canada.

NBF documents the population growth for this age group in the first four months of each year. The growth averaged 110,000 between 2007 and 2022, and consistently below 160,000 during that period each year. However, in the first four months of 2023, this number surged to 278,000 and then jumped 47 percent in the first four months of this year to 410,000.

The major metropolitan areas experienced the most significant growth. The Greater Toronto Area saw a record population increase of 107,000 at the start of the year, a 66 percent acceleration from the growth rate from the same period in 2023, the report said. Greater Montreal and Greater Vancouver also experienced substantial growth, more than doubling the levels from 2023.

“Conclusion: with Ottawa having announced its intention to limit immigration from 2025, it would seem that many people have decided to come to Canada earlier. Housing affordability problems could worsen over the next few quarters, as we head for another record year of population growth,” the NBF report stated.

Immigration Minister Marc Miller announced in January that Canada would reduce new visas for international students to slow the surge in temporary residents. The cap for 2024 is expected to lead to a 35 percent decrease in approved study permits from 2023, to 360,000.

Impacts

The federal government’s plan to welcome 500,000 immigrants per year starting in 2025 has drawn considerable scrutiny, with concerns raised about its effects on the economy, housing, and services, according to a 2022 report from Immigration, Refugees and Citizenship Canada (IRCC) obtained by The Canadian Press in January through an access-to-information request.

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Deputy Prime Minister Chrystia Freeland downplayed concerns raised in the IRCC report that large increases in immigration would impact housing affordability. Instead, she said at a Toronto press conference in January that immigrants are a “real driver” of Canada’s economic growth.

Housing Minister Sean Fraser also cautioned against solely attributing Canada’s housing crisis to immigration. Responding to a news report suggesting his government received warnings from IRCC two years ago about the impacts of high immigration levels on housing affordability, Mr. Fraser stated, “No one ignored any warnings.”

Additionally, the government’s policy of high immigration faced scrutiny for adding pressure on Canadian workers. On Dec. 7, 2023, the immigration minister announced an extension of the waiver on the 20-hour-per-week limit on off-campus work for international students until April 30.

Mr. Miller has acknowledged that approximately 646,000 foreign students in Canada, or 80 percent of the total 807,000, were working more than 20 hours per week. However, he defended the policy to waive the cap on working hours, stating at the time of the announcement, “I don’t think students are taking jobs away from other people given the labour shortages that are happening in Canada.”

A motion from the Bloc Québécois Feb. 12, backed by all non-Liberal MPs, urged the Liberal government to reassess its high immigration quotas.

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