Trudeau's immigration plan strained Canada's housing market, says report

According to the Canada Mortgage and Housing Corporation (CMHC) and Statistics Canada, the country needs 3.5 million new units by 2030 to have affordable housing.

Trudeau's immigration plan strained Canada's housing market, says report
The Canadian Press / Adrian Wyld
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The Canada Mortgage and Housing Corporation (CMHC) claims Vancouver and Toronto have the slowest approval times for building new homes in the country. Conservative leader Pierre Poilievre pledges to change that as prime minister.

"Slow permits mean higher prices. Higher prices mean Canadians can't afford to put a roof over their head," Poilievre told reporters in Vancouver on July 14.

"A Poilievre-led government will incentivize our cities to speed up and lower the cost of building permits to free up land so builders can build, build, build."

According to the CMHC and Statistics Canada's Municipal Land Use and Regulation Survey, they estimate that Canada needs 3.5 million new units by 2030 for Canada to have affordable housing.

Another CMHC report attributed long approval times to rising building costs and burdensome regulations with longer timelines for approval. Toronto and Vancouver experienced the longest approval times in the country.

Last week, the Bank of Canada flagged unprecedented population growth for soaring housing prices, with supply failing to meet growing demand.

"Strong population growth from immigration is adding both demand and supply to the economy: newcomers are helping to ease the shortage of workers while also boosting consumer spending and adding to demand for housing," according to the central bank.

Canada's population grew by more than one million people last year — a record for the country — and 2.7% growth year-over-year compared to 2021. 

The strong population growth comes as Parliament eyes higher annual immigration targets, which would reach 500,000 new immigrants per year by 2025. However, the annual quotas have strained the housing market, with key interest rates rising to their highest level in 22 years.

Desjardins said Canada needs to build 100,000 more units annually to offset higher prices caused by a growing population.

BMO estimated that for every 1% of population growth, housing prices typically increased by 3%.

"It now takes 25 years in Canada's biggest city to save up for a downpayment. It used to be, before Trudeau, 25 years was what it took to pay off a mortgage. Now it's what it takes to get a mortgage," said Poilievre.

"Nine in 10 of our young people believe they will never afford a home. This is the first generation of youth in Canadian history that has given up on homeownership."

The Tory leader added that rent in Canada hit an all-time high last month at $2,042 for the average unit.

Senior Desjardin economist Randall Bartlett warned that unaffordable housing could damage public support for higher immigration, which he said is vital to offset the economic impacts of aging, especially in healthcare.

"If that leads to scaling back immigration in a meaningful way, then that means Canadians are gonna be facing a significant bill going forward to meet the aging costs of older Canadians," said Bartlett.

Proponents of higher immigration argue the labour market can absorb more workers and that the country needs more working-age Canadians to support the tax base as more people retire.

"We're bringing in very talented people…[that] generate earnings very quickly that are outpacing the Canadian average," said Bartlett.

To address Canada's housing crisis, Poilievre promised to mandate 15% more housing permits in metropolitan hubs like Vancouver and Toronto. Should that not happen, Poilievre said they would revoke their access to federal grants. 

He also renewed his promise to build high-density apartments "around and sometimes even on top of [public transit stations]."

"The dream of homeownership, achievable only eight years ago, will be realized once again," he said.

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