I called this blog “Immigration Vs. Housing Supply” for a reason. It’s often touted this way when you read news articles on social media, online, or hear the debate on news channels (If anyone still watches those). There is a deep irony in this framing though, as the Housing Supply NEEDS Immigration in order to succeed, or better phrased, advance. So I wholeheartedly disagree with this assumption for the record.

First off though, we will start with the basics. It will come as no surprise to you all that Canada has a deep housing issue, namely supply. This is seen widespread across Canada, and not just in Vancouver, Toronto or Montreal. So with the Canadian Government aiming for 500,000 new immigrants a year, how in the world are we going to deal with these additional bodies?!

According to the latest statistics from CMHC, Canada started construction on 286,000 new home builds in 2022. Slightly down (by about 5%) from 2021. According to studies, it’s expected that the average household has 2.4 people. I know the .4 looks strange, but we’re dealing with numbers here. So that means we essentially need 208,000 additional homes a year to maintain where we are at now. Last year and the year before we accomplished this, however things are slowing down, and they are slowing down EXTREMELY fast in the new construction world.

When it comes to wannabe-homeowners specifically (not those looking to rent) we are already low on inventory. A study carried out by Royal Lepage in 2019 (I went with pre pandemic numbers to avoid unrealistic skews) about 75% of new immigrants come to Canada with funds in the bank to purchase a home, and 86% look at real estate as a good investment. So the desire is there from the forefront. Around 15% of newcomers to Canada purchase a home straight away, and around 32% purchase within 3 years of moving here. In fact, the desire is so much that new immigrants say they are more comfortable to pay higher prices to secure a home. You can check out the report here. A basic oversight is that ‘3 years to buy a home’ is always maturing. I.e. in 2023 we will see immigrants to Canada from 2020 now looking at purchasing. 2024 will be immigrants from 2021 and so on…

As of 2020 we were at 420 housing units per 1,000 people. Down from 427 in 2016. Essentially our population is growing faster than we are building, substantially faster. We are the lowest ratio in the G7. More recently a 2023 Scotiabank study was carried out which says we need to build another 3,500,000 units on top of our existing housing supply goals in order to just achieve housing affordability by 2030. You can see the 2021 study here, and the 2023 study here.

Now let's play the optimist for a second and imagine those 3.5 million homes have been given the go ahead, developers and builders have land to use, permits are issued and we can start hitting the dirt NOW. We’re still faced with the challenge (and it’s a big one) WHO exactly is going to build these homes? The Canadian Construction Association states there are close to 93,000 current vacancies in the Construction industry. To add salt to the wound, it’s expected a fifth of Construction workers are due to retire over the next 10 years. If you speak to any Construction outfit they’ll tell you the education pool is not looking good either. Various provinces have allocated incentives for those currently in education to be exposed to trades work in order to help. However this is long term, and not a quick fix.

This is where immigration comes in, and REALLY is the only short term answer in my opinion. Skilled workers coming from overseas allow an immediate boost to the workforce. They have the skills, albeit need a small amount of time to grasp the nuances of local codes and expectations. They provide a quick answer to skills shortages, and they WANT to work. I’m not alone in this thinking, the Alberta Provincial Government has actively amended their Provincial Nominee program to allow for construction workers, British Columbia has also followed suit. IRCC has opened the door to out of status workers in Canada. Top Tip: You know it’s an urgent need when immigration rules change, they are the last to usually do so.

This is not just for the Construction Industry, but for supporting industries too. Healthcare for one, who is going to take care of these additional workers when accidents/sickness happen? Educators, who will teach those coming into the industry? Engineering, Who will provide this side of the business? Human Resources, who will service those additional immigrants looking to get paid and pay taxes etc? Emergency Services and so on. You can really build this out and see how it touches a wide range of industries - Healthcare, Education, Engineering, Finance, Emergency Services and more.

It’s just not achievable to find a quick fix without immigrants. Not just a quick fix, but a great fix. A fix that entails workers who are trained, motivated and want to contribute. Immigrants are an essential part of the solution. Without them, Canada is going to face an even harder, longer term struggle. Hard working immigrants were a huge part of what made this country what we enjoy today. They were then, and still are today, an essential need for Canada.

Ben Robinson PREC*
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