Housing crisis in Canada – Here’s everything you need to know

Last updated June 19, 2023, 10:30 AM EDT (Toronto time)

Canada’s housing crisis has developed into a pressing problem affecting regions across the country.

Canada’s population passed 40 million on June 16, with immigration accounting for almost the entire increase.

The federal government has set a record number of immigration targets for 2023-2025, aiming to welcome approximately 1.5 million immigrants.

Immigration is important to the Canadian economy, but Canada’s housing crisis is growing, even after an increase in the Bank of Canada rate from 0.25% to 4.75% since January 2022.

Homeowners have passed on the increase in their monthly mortgage payments to tenants by raising rents.

The huge influx of international students, foreign workers and permanent residents from outside Canada find it difficult to find affordable accommodation.

Not enough new houses are being built in the big cities, causing house prices to rise, but new house construction has fallen.

The housing problem not only affects people and families looking for cheap and safe housing, but it also has wider implications for the economy and society.

Factors that contributed to Canada’s housing crisis

There are multiple factors that have led to Canada’s current housing shortage, including population growth, limited housing supply, growing demand from both local and international buyers, speculative investment and inadequate housing legislation.

IRCC manages the processing of approximately 2 million immigration and visa applications at any given time.

The plan for immigration levels to welcome about 1.5 million people by 2025 is for permanent residence only.

In fact, the number of temporary residents admitted each year is much too high compared to permanent residence.

By comparison, Canada approved 551,405 new study permits, 650,000+ new work permits, 3 million temporary resident (or visitor) visas, compared to only 437,180 permanent residents in 2022.

Most of Canada’s population is concentrated in metropolitan cities and new immigrants also prefer to live their Canadian dream in these larger cities.

More than half of Canada’s population lives in just 10 major metropolitan areas of Canada; Toronto, Montreal, Vancouver, Calgary, Edmonton, Ottawa-Gatineau, Winnipeg, Quebec City, Hamilton and Kitchener.

And more than half of these are just Montreal, Toronto and Vancouver because newcomers prefer MTV territory.

This has created a housing crisis with most people wanting to stay in big cities or nearby areas, but not enough houses are being built to accommodate the influx of new arrivals.

Consequences for the economy and society

The Canadian economy certainly depends on immigrants. The Immigration Minister said on June 16 that they want to target immigrants who can play a role in building new homes.

The current housing crisis in Canada has profound implications for both the economy and society.

This has led to an affordability crisis for families, wealth disparities, homelessness and reliance on social services.

Canada has one of the largest housing bubbles compared to the rest of the world and is still growing.

As we know, the most important aspect of the economy is supply and demand. With the increased demand for housing in Canada, the dream and shrinking supply of housing has led to an affordability crisis.

In summary, Canada’s housing crisis poses a significant number of problems and demands immediate concrete action from the Canadian government.

This approach should include immigration reforms, increased housing supply, measures to improve affordable housing and community participation.

The Municipal Nominee Program (MNP) which allows local communities, chambers of commerce and local labor councils to directly sponsor permanent immigrants was part of letter of mandate from the minister of immigration in 2019.

However, it takes a little too long or we can say lost somewhere.

Such programs can help distribute newcomers in Canada to the municipalities most in need of their skills and will also better equip newcomers to become successful.

Similar immigration routes should be introduced by the Canadian government for medium (population 100,000-500,000) and small towns (<100,000).

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