Canadian Population Boom & Housing – How do these compare?
Canadian Population Boom
Post pandemic, you might have noticed that wherever you travel in Canada, you find a lot more people than before. My wife and I are avid travellers who love to explore our beautiful country every now and then. We have noticed this trend in Quebec, Ontario, Alberta and British Columbia. Another observation that we made was that most new immigrants were students and people on work permits. Many franchise outlets and mom and pop stores were also run by students. And there were more people especially from India than before.
In Mississauga, our team has helped to settle many new immigrants who landed as Permanent Residents or as work permit holders. Some of these people rented condos in City Centre and Central Erin Mills neighbourhoods. We were also approached by a few refugees from Ukraine and Afghanistan seeking accommodation after moving in.
No wonder, our population grew 2.7% or by over 1 million for first time in 2022, making it the fastest expansion among advanced economies! Canada added a record 1,050,110 people over a one-year period, bringing the total population to 39,566,248 as per Statistics Canada.
International migration accounted for 95.9% of the growth in 2022.
This is the first time our immigrant-friendly nation has grown by more than a million people in a year.
If this growth is sustained, it would lead to Canada doubling it’s population size in about 26 years.
The remarkable population growth is the result of the government’s plan to add about 500,000 new permanent residents annually. A recent poll by Nanos Research Group for Bloomberg News showed that 52% of respondents found this plan to have a positive impact on Canadian economy.
The government has consistently increased its immigration targets to meet labour shortages and to boost economic growth and there is broad public support for this policy. However, it also puts extreme pressure on an already dwindling housing supply, infrastructure, transportation and other public services such as an already swamped health care system.
We are already witnessing soaring rents and shortage of affordable housing, especially in urban hubs such as the GTA, where majority of new immigrants move to.
In terms of residential real estate, the government keeps shuffling between many rules and regulations. In an effort to make housing more accessible to Canadians, they had put a 2 year ban on foreign home buying. This put many work permit holders in a lurch.
In response to making housing equally accessible to this segment of newcomers, the government announced on March 27, 2023 that it is making amendments to the foreign home buying ban.
Now, work permit holders are eligible if they have 183 days or more of validity remaining on their work permit or work authorization at time of purchase, and they have not purchased more than one residential property. The current provisions on tax filings and previous work experience in Canada are being repealed.
Who all is contributing to the Population Growth
1 million is the highest annual population growth on record since 1957. The previous record population growth rate (+3.3%) was tied to the high number of births during the baby boom era and high immigration of refugees following the Hungarian Revolution.
In 2022, the reason behind Canada’s record-high population growth is international migration (95.9%).
The increase seen in international migration is related to an aging population and low unemployment rates, in addition to points mentioned above.
Canada is by far leading the G7 countries for population growth in 2022, as it has been for many years. Canada’s population growth rate of 2.7% in 2022 puts it among the top 20 in the world. Almost all countries with a higher pace of population growth were in Africa.
If it stays consistent, this rate of population growth would lead to the Canadian population doubling in about 26 years.
Temporary immigration is the leading contributor to Canada’s growth
All provinces and territories saw a year-over-year increase in the net estimated number of non-permanent residents in 2022, with work and study permits, in addition to the number of asylum claimants
Canadian Population Boom & Housing – Do these add up?
A recent Scotiabank housing report found that Ontario is last in the country in the supply of homes per capita, and Canada has the lowest amount of housing per capita of any G7 country.
The housing supply shortage is a Canada-wide problem, with high interest rates, construction material shortages and rising inflation among the contributors.
Finding affordable homes in Ontario is all too challenging for First Time Buyers, Newcomers, Downsizers & those looking to upsize.
To help address this issue, the Canadian government is committing to build 1.5 million homes over the next 10 years, under the More Homes, Built Faster Action Plan. This plan addresses the crisis by reducing government fees and fixing development approval delays that slow housing construction and increase costs. Read more on Ontario government’s measures, efforts and progress on addressing the housing supply issue.
There are a lot of plans on paper and a lot is actually happening too. But how fast can we resolve the housing supply issue remains to be seen.
Can the housing market keep pace with the population growth – a lot needs to happen, very fast.