Canada is slated to welcome 1.2 million newcomers through 2023, but in a country that chronically undersupplies housing, that could exacerbate existing affordability woes.

Upon its announcement in October 2020, Immigration, Refugees and Citizenship Canada (IRCC) noted that 60% of the newcomers — of whom 401,000 arrived this year, 411,000 will arrive next year, and 421,000 in 2023 — belong to the “economic class,” meaning they’re investors, entrepreneurs, and generally moneyed individuals and families.

According to a report from Scotiabank earlier this year, Canada produces the fewest units of housing per 1,000 residents of the G7 nations. In fact, the units of production have been declining since 2016 because of population growth.

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“An extra 100,000 dwellings would have been required to keep the ratio of housing units to population stable since 2016 — leaving us still well below the G7 average,” said the report from Scotiabank’s Jean-François Perrault.

Is an acute rise in newcomers, the majority of whom settle in Canada’s three biggest cities, two of which have the highest housing prices in the country, prudent in light of how slowly development occurs?

Canada is indeed a country of immigrants — without them, especially skilled workers, the economy would invariably sputter — but it is also a country of entrenched bureaucracy, which might be the predominant reason housing supply consistently falls well short of demand. How can it keep up when demand keeps growing because the government is welcoming more people than it can house?

Richard Lyall, President of the Residential Construction Council of Ontario (RESCON), champions immigration, even arguing that perhaps Canada doesn’t bring in enough workers to fulfil crucial shortages. Ontario has a massive skilled trades worker deficit, a problem RESCON noted will worsen in the coming decade, but Lyall says more tradespeople means the construction industry could support more active building sites and that would, theoretically, augment the number of housing units completed annually.

“We need to triple the number of immigrants with skilled trades from where we currently are right now just to get it to where it should be. We need immigrants who come with skilled trades rather than who come here to learn skilled trades, and we need to entice them to come to Canada,” Lyall said. “With more skilled trades, we’ll build more.”

There’s ample evidence that Canada can easily attract immigrants with skilled trades experience, too.

“If I go into a large job site in downtown Toronto, it’s like the United Nations and it’s a beautiful thing to behold,” Lyall added.

However, there’s also scarce evidence that the federal government uses immigration as a tool to fill gaps in sectors of the economy that have worker shortages, pronounced or otherwise. And just because immigrants are permitted entry into Canada to work in particular fields, that doesn’t mean they have to stay in those jobs permanently.

“You should have a good handle on the different needs of the economy, plan accordingly and bring them in,” Lyall said. “Some will find their way to different jobs, but with so many skilled trades jobs, and not just in construction, when those jobs go unfilled it hurts the economy. We put too much money in university education through subsidies and not enough into the skilled trades. Now some changes are happening [through student awareness programs] and government has responded well to that, but those things take time, so the immediate solution is to raise skilled trades through immigration.”

Even if the number of skilled tradespeople manifoldly increases enough to spur more active job sites, bureaucracy is the difference between getting a shovel in the ground in one, maybe two, years and four.

But digitizing site plan approvals, rezoning, and even incorporating a Building Information Modelling system, could expedite the process, Lyall says.

“Modernize and digitize the system,” he said. “Right now, we have more things to build than we have people to build them. If they want to increase the number of people coming here, we’ll have to build more, but do the math and you’ll see we don’t have enough people currently to do that, so how in the hell are we going to do it in the future?”

Written By
Neil Sharma

Neil has covered real estate for a number of years as a Toronto-based journalist. Before joining STOREYS, he was a regular contributor for the Toronto Star, Toronto Sun, National Post, Vice, Canadian Real Estate Wealth, and several other publications. Have a real estate story? Email him at [email protected]

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