Canada Housing Crisis – Here Is All You Need To Know
Canada’s housing crisis has escalated into a pressing issue, affecting regions across the nation. The population of Canada surpassed the 40 million mark on June 16, with immigration accounting for virtually all of the increase. The federal government has established record immigration targets for 2023-2025, aiming to welcome around 1.5 million immigrants. While immigration is crucial for the Canadian economy, the housing crisis continues to grow, even after the Bank of Canada’s rate was raised from 0.25% to 4.75% since January 2022.
The Underlying Factors of the Housing Crisis
Several factors have contributed to the current housing shortage in Canada. These include population growth, a limited housing supply, increasing demand from local and international buyers, speculative investment, and inadequate housing legislation.
The Immigration, Refugees and Citizenship Canada (IRCC) is handling the processing of approximately 2 million immigration and visa applications at any given time. The immigration levels plan of welcoming around 1.5 million by 2025 is only for permanent residency. The number of temporary residents admitted yearly is even higher than permanent residency.
The Impact on Major Cities
Most of the Canadian population is concentrated in metropolitan cities, and new immigrants also prefer to live their Canadian dream in these larger cities. More than half of the Canadian population resides in only 10 large urban areas of Canada; Toronto, Montreal, Vancouver, Calgary, Edmonton, Ottawa-Gatineau, Winnipeg, Quebec City, Hamilton, and Kitchener. This has caused a housing crisis with most of the people wanting to stay in major cities or nearby areas, but not enough homes being built to accommodate the influx of newcomers.
The Repercussions on Economy and Society
The current Canada housing crisis has profound repercussions for both the economy and society. This has led to a family affordability crisis, disparities in wealth, rates of homelessness, and the demand placed on social services. Canada has one of the biggest housing bubbles when compared to the rest of the world and it’s still growing. The major aspect of the economy is demand and supply. With the increased demand of living the Canadian dream and a lesser supply of housing, an affordability crisis has ensued.
The Need for Immediate Action
The Canada housing crisis presents a substantial number of difficulties and calls for immediate concrete steps from the Canadian government. This approach should include immigration reforms, greater housing supply, measures to improve affordable housing, and community participation.
The Municipal Nominee Program (MNP) that could allow local communities, chambers of commerce, and local labor councils to directly sponsor permanent immigrants was part of the immigration minister’s mandate letter in 2019. However, it is taking too long to implement. Such programs can help disperse newcomers to Canada to the municipalities that need their skills the most and will also be a better fit for newcomers to set up for success. The Canadian government should introduce similar immigration pathways for medium (population 100K-500K) and small cities (<100K).
Canada’s Population in 2023
As of June 19, 2023, the latest updated number of the Canadian population is 40,008,788. The continuous influx of immigrants and the growing population further emphasize the needto address the housing crisis promptly and effectively.
The Role of Immigration in Canada’s Housing Crisis
Immigration plays a significant role in Canada’s housing crisis. The federal government’s ambitious immigration targets for 2023-2025 aim to welcome around 1.5 million immigrants. While this influx of newcomers is vital for the Canadian economy, it also exacerbates the housing crisis.
The influx of international students, foreign workers, and permanent residents from outside Canada has increased demand for affordable accommodation. However, the construction of new houses across major cities has not kept pace with this demand, leading to an increase in home prices.
The Impact of the Bank of Canada’s Rate Hike
The Bank of Canada’s rate hike from 0.25% to 4.75% since January 2022 has significantly impacted the housing crisis. Homeowners have passed on the increase in their monthly mortgage payment to tenants by raising the rent, further exacerbating the affordability issue.
The Housing Crisis and Its Wider Implications
The housing crisis in Canada has wider implications beyond the immediate issue of affordability. It affects individuals and families looking for affordable and secure housing and has broader economic and societal ramifications.
The housing crisis has led to a family affordability crisis, disparities in wealth, increased rates of homelessness, and a higher demand placed on social services. Furthermore, Canada has one of the largest housing bubbles compared to the rest of the world, which continues to grow.
The Need for a Comprehensive Approach
Addressing the housing crisis requires a comprehensive approach that includes immigration reforms, increasing the housing supply, measures to improve affordable housing, and community participation.
The Municipal Nominee Program (MNP), which could allow local communities, chambers of commerce, and local labor councils to sponsor permanent immigrants directly, was part of the immigration minister’s mandate letter in 2019. However, its implementation has been slow. Such programs can help disperse newcomers to Canada to the municipalities that need their skills the most, setting them up for success.
The Canadian government should also consider introducing similar immigration pathways for medium (population 100K-500K) and small cities (<100K), to help alleviate the housing pressure on major cities.
In conclusion, the Canada housing crisis is a complex issue that requires immediate attention and a comprehensive approach. With the right measures in place, it is possible to address this crisis effectively, ensuring a better future for all Canadians.