Federal officials warned the Government of Canada two years ago that large increases in immigration could affect housing affordability and services, according to internal documents.
These documents obtained by The Canadian Press through an access to information request show that Immigration, Refugees and Citizenship Canada analyzed the potential effects of immigration on the economy, housing and services, as it prepared its immigration targets for 2023 to 2025.
The Deputy Minister, among others, had been warned in 2022 that housing construction had not kept pace with population growth. “In Canada, population growth has outpaced growth in the number of available housing units,” we can read. “As the federal authority responsible for managing immigration, the department’s decision-makers must understand the disconnect between population growth and housing supply, as well as how permanent and temporary immigration shape population growth. »
Immigration is responsible for almost all population growth in Canada, given the country’s aging population.
The federal government has finally decided to increase the number of permanent residents that Canada welcomes each year to 500,000 in 2025. This means that in 2025, Canada will welcome almost twice as many permanent residents as in 2015.
A document reveals that federal officials were well aware of the pressures that strong population growth would place on housing and services. “Rapid increases are putting pressure on health care and affordable housing,” officials warned. “Settlement and resettlement service providers are expressing short-term difficulties due to labor market conditions, increased levels and initiatives in Afghanistan and Ukraine. »
Housing affordability has now become a political liability for the Liberal government. The Conservatives have gained considerable momentum over the past year as the party tackles issues of affordability, while avoiding the issue of immigration in particular. These pressures forced the Liberal government to refocus its efforts on housing policy and begin addressing the increase in international students with new rules.
Recent data shows that Canada’s population growth rate continues to set records, with the country also welcoming historic numbers of temporary residents, largely thanks to international student and temporary foreign worker programs.
The country’s population increased by more than 430,000 people during the third quarter of 2023, marking the fastest pace of population growth on record since 1957. Financial analysts to academic institutions have warned that the strong population growth of Canada is eroding housing affordability as demand outstrips supply.
The Bank of Canada has issued a similar analysis. Toni Gravelle, deputy governor since October 2019, gave a speech last month in which he warned that strong population growth was driving up rent costs and housing prices.
Public opinion polls also show that Canadians are increasingly concerned about the strain immigration puts on services, infrastructure and housing, leading to declining support for high immigration.
The Liberal government has defended its immigration policy decisions, saying immigrants contribute to economic prosperity and help improve the country’s demographics as the population ages. However, amid increased scrutiny of the Liberal government’s immigration policy, Immigration Minister Marc Miller set the annual target at 500,000 permanent residents for 2026.
Attention now shifts to the sharp increase in the number of non-permanent residents. Between July and October, about three-quarters of Canada’s population growth came from temporary residents, including international students and temporary foreign workers.
This trend raises alarms about companies’ growing reliance on low-wage migrant workers and the luring of international students to questionable post-secondary institutions.
Mikal Skuterud, an economics professor at the University of Waterloo in Ontario who specializes in immigration policy, says the federal government appears to have lost control of temporary migration flows. Unlike the annual targets for permanent residents, the number of temporary residents is driven by demand for migrant workers and international students.
It also notes that there is a link between permanent resident targets and the flow of temporary residents. “To the extent that you increase the number of permanents and migrants realize that to get permanence you have to come here as a temporary resident… then migrants are incentivized to come and try their luck,” he observed .
Professor Skuterud, who has been a vocal critic of the federal government’s immigration policy, says the benefits of high immigration have been exaggerated by the Liberals. He says starting around 2015, when the Liberal government was first elected, a narrative developed in Canada that “immigration was somehow a solution to Canada’s economic growth problems.”
And while Professor Skuterud says people like to believe this talk, he notes that higher immigration doesn’t do much when it comes to raising living standards, as measured by domestic product. real gross (GDP) per capita.
Officials from Immigration, Refugees and Citizenship Canada agree, documents obtained by The Canadian Press. “The increase in the working-age population may have a positive impact on gross domestic product, but little effect on GDP per capita,” they noted.