Immigration is making Canada's housing more expensive. The government was warned 2 years ago
'In Canada, population growth has exceeded the growth in available housing units,' says IRCC warning
Federal public servants warned the government two years ago that large increases to immigration could affect housing affordability and services, internal documents show.
Documents obtained by The Canadian Press through an access-to-information request show Immigration, Refugees and Citizenship Canada analyzed the potential effects immigration would have on the economy, housing and services, as it prepared its immigration targets for 2023-2025.
The deputy minister, among others, was warned in 2022 that housing construction had not kept up with the pace of population growth.
"In Canada, population growth has exceeded the growth in available housing units," one slide deck reads.
"As the federal authority charged with managing immigration, IRCC policy-makers must understand the misalignment between population growth and housing supply, and how permanent and temporary immigration shapes population growth."
Immigration accounts for nearly all population growth in Canada, given the country's aging demographics.
The federal government ultimately decided to increase the number of permanent residents Canada welcomes each year to 500,000 in 2025, a decision that drew considerable attention and scrutiny. That means that in 2025, Canada will welcome nearly twice as many permanent residents as it did in 2015.
The document reveals federal public servants were well aware of the pressures high population growth would have on housing and services.
"Rapid increases put pressure on health care and affordable housing," public servants warned. "Settlement and resettlement service providers are expressing short-term strain due to labour market conditions, increased levels and the Afghanistan and Ukraine initiatives."
Demand outpacing supply
Housing affordability has now become a political liability for the Liberal government. The Conservatives have gained considerable momentum over the last year as the party pounces on affordability issues, while avoiding the issue of immigration in particular. These pressures have forced the Liberal government to refocus its efforts on housing policy and begin to address the spike in international students with new rules.
Recent data shows Canada's pace of population growth continues to set records as the country brings in a historic number of temporary residents as well, largely through international student and temporary foreign worker programs.
The country's population grew by more than 430,000 during the third quarter of 2023, marking the fastest pace of population growth in any quarter since 1957.
Experts spanning from Bay Street to academic institutions have warned that Canada's strong population growth is eroding housing affordability, as demand outpaces supply.
Increasing concern
The Bank of Canada has offered similar analysis. Deputy governor Toni Gravelle delivered a speech in December warning that strong population growth is pushing rents and home prices upward.
Public opinion polls also show Canadians are increasingly concerned about the pressure immigration is putting on services, infrastructure and housing, leading to waning support for high immigration.
The Liberal government has defended its immigration policy decisions, arguing that immigrants help bring about economic prosperity and help with the country's demographics as the population ages.
Amid the heightened scrutiny of the Liberal government's immigration policy, Immigration Minister Marc Miller levelled out the annual target at 500,000 permanent residents for 2026.
Immigration,
Refugees and Citizenship Minister Marc Miller holds a press conference
on Parliament Hill in Ottawa on Thursday, Dec. 7, 2023. (Sean Kilpatrick/The Canadian Press)
The documents from 2022 note that Canada's immigration targets have exceeded the recommendations of some experts, including the Century Initiative, an organization that advocates for growing the country's population to 100 million by the end of the century.
However, attention is now shifting from these targets to the steep rise in 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.
That trend is raising alarms about the increase in businesses' reliance on low-wage migrant workers and the luring of international student by shady post-secondary institutions.
Mikal Skuterud, an economics professor at the University of Waterloo 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 dictated by demand for migrant workers and international students.
Immigration and GDP
He also notes there is a link between the targets for permanent residents and the flow of temporary residents.
"To the extent that you increase permanent numbers, and migrants realize the way you get a PR is to come here as a temporary resident ... then migrants are incentivized to kind of come and try their luck," he said.
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 said that starting around 2015, when the Liberal government was first elected, a narrative developed in Canada that "immigration was kind of a solution to Canada's economic growth problems."
While the professor says that narrative is one that people like to believe, he notes higher immigration does little when it comes to increasing living standards, as measured by real GDP per capita.
Public servants at IRCC are in agreement, the released documents suggest.
"Increasing the working age population can have a positive impact on gross domestic product, but little effect on GDP per capita," public servants noted.
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Housing minister warns against resistance to ending exclusionary zoning
'Be more ambitious than your neighbours' if you want federal funding, Fraser tells cities
Canada's Housing Minister is warning that municipalities won't succeed with applications for federal housing accelerator funding unless they are flexible on zoning rules.
Speaking Wednesday at an Empire Club of Canada luncheon in Toronto, Sean Fraser said a willingness to adopt zoning reforms has been key for the communities that have signed deals with Ottawa.
Fraser said the federal government has seen "a change in approach overnight" on the part of cities that were initially resistant to such changes, as competition for the money has prompted some jurisdictions to become more open to reform.
"If you want to tap into the fund, be more ambitious than your neighbours," Fraser said.
"There are cities who won't receive funding because they don't want to end exclusionary zoning in Canada. I know who some of them are and maybe they'll change their ways."
The Housing Accelerator Fund, which is meant to spur the creation of housing supply, includes $4 billion in federal funding for Canadian municipalities and Indigenous governments. The program is set to run until 2026-27.
The cities of St. Catharines, Ont. and Saint John, N.B., became the latest to sign deals with the federal government to receive accelerator funding on Wednesday, bringing the total to 22 agreements under the program.
Fund administrator Canada Mortgage and Housing Corp. has said an end to exclusionary zoning is among the best practices used in successful applications.
That includes getting rid of low-density zoning and regulations that exclude affordable and social housing in residential areas, and instead allowing mixed-use development and high-density residential within proximity to urban cores and transit corridors.
Fraser said the federal government received around 540 applications for the fund, but only about 150 may end up being successful.
"The reality is there's not a city who signed a deal with us who hasn't more or less ended exclusionary zoning in Canada," Fraser told the Toronto audience.
"Cities should know that if you're not willing to be amongst the most ambitious cities in the country when it comes to zoning reform permitting processes, you won't be successful."
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$10M in federal funds for multi-unit housing in Fredericton
City expects new programs to create nearly 300 units over 3 years
Fredericton will receive more than $10 million from the federal government to help encourage the rapid development of nearly 300 housing units in the next three years.
"We'll be able to get more houses built faster," said Mayor Kate Rogers.
"It certainly won't cover all of the need, but it will be a piece of it."
The funding, under the housing accelerator fund, will be used for a series of grant programs to encourage high-density and mixed-use housing changes to cut red tape in the permit process.
Rogers said the city is committed to ensuring many of the new houses are "economical," given the lack of affordable housing in the area. She said they will be working with market developers, non-profits, co-ops, and they will be encouraging alternative types of units, such as garden suites and modular homes.
"We recognize where the need is, and right now we sort of call it that missing middle," she said. "Working folks who need housing that are feeling priced out of the market."
Fredericton Mayor Kate Rogers says the city is focused on encouraging
the construction of affordable housing units. (Aidan Cox/CBC)
Rogers said the city will also be looking at making city-owned land more affordable and appealing to developers by putting services in place.
Fredericton applied for the funding through the federal fund, a $4-billion program designed to speed up housing construction across Canada. Fredericton's request was based on the city's affordable housing strategy.
The changes to cut red tape and encourage development could provide enough incentive to build 2,500 homes in Fredericton over the next decade, according to the federal government.
Several of the new programs require zoning and bylaw changes, including a condition that the city allow four-unit dwellings by default in all residential areas.
Rogers said some of the bylaw and land-use changes have already been made, while others will go before council for approval and public comment in the coming months. She said the city will have to consider which areas can accommodate multi-unit buildings.
"The city is always balancing that, how do we maintain the feel of the neighbourhood while also increasing the density of the neighbourhood," she said.
Rogers said the money could help speed up developments that are currently in the planning stages.
"This funding helps us to get that done faster and also get money into the hands of developers who want to work with us to build the types of development that we need in this city," she said.
The federal government made similar announcements in other New Brunswick cities earlier this month, committing more than $15 million in Moncton and nearly $9.2 million in Saint John.
In Moncton, the city anticipates the funding it will receive will result in 490 new units over the next three years.
In Saint John, the city expects to see 285 new housing units in the same time frame.
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"In early November, Premier Blaine Higgs reportedly said he was considering legislation to block federal housing funding from being given directly to municipalities.
When Global News asked for comment regarding the funding announcement, Higgs said in an e-mailed statement: “Bypassing provincial governments is not the solution. Collaboration is key here as we need all three levels of government to work together on housing and other critical files.”
He also said: “We are also asking for the same consideration that Quebec has in place to work directly with the federal government on key funding initiatives geared to our communities.”
Quebec’s legislation requires the federal government to collaborate with the province rather than municipal governments.
When asked about this at the funding announcement, Moncton-Riverview-Dieppe federal MP Ginette Petitpas Taylor said Higgs should “put money on the table” for housing, and create incentives for builders."
Higgs and our inter gov affairs minister don't see eye to oeil
Saint John gets nearly $9.2M to build more housing, faster
Prime Minister Justin Trudeau says the Housing Accelerator Fund deal will fast-track 285 units over 3 years
Prime Minister Justin Trudeau has announced nearly $9.2 million for Saint John to help fast-track 285 new housing units over the next three years.
The $9.18-million funding agreement, under the federal government's Housing Accelerator Fund, will provide more housing options in the city, including more rental units and affordable housing, he said during a news conference in Saint John on Wednesday, joined by Saint John-Rothesay MP Wayne Long and Mayor Donna Reardon.
"We've worked very, very hard with the City of Saint John to come to an ambitious proposal that's going to increase densification, that's going to accelerate the processes in terms of building more housing more quickly," Trudeau said.
"They're looking at freeing up public land for housing. They're looking at all the different things that are going to not just make individual projects happen, but change the way all housing is built."
The announcement comes following the death of Evan McArthur, 44, in a homeless tent encampment fire near the Main Street Viaduct over Route 1.
The agreement could help spur the construction of more than 1,700 homes over the next decade and help meet the demand in Saint John, according to the federal government.
It's a "pivotal moment" for Saint John, according to the mayor.
"This partnership is more than just a financial commitment, it's a promise to our residents," said Reardon.
The city is dedicated to accelerating the development of affordable housing and ensuring every member of the community has a place to call home, she said.
"This initiative is more than just building houses, it's about building a future."
Saint
John Mayor Donna Reardon said the announcement shows the federal
government recognizes that housing is the 'cornerstone of healthy,
vibrant and inclusive communities and the need for assisting
municipalities in addressing local housing challenges.' (Radio-Canada)
Under the agreement, Saint John will provide incentives to boost construction of affordable units, apartments, townhouses, and secondary suites, which are private, self-contained units within existing homes.
The deal also says the city will use public lands for developments, amend its zoning bylaw to permit higher density in key areas, with up to four units per residential lot, and introduce electronic permitting for various stages of construction.
As a small city with a big heart, we have to be bold and we want to grow.
— Donna Reardon, mayor
"It brings transformational and most importantly, systemic change at the municipal level that will continue to move us forward in creating a community that is conducive to housing and focuses on addressing the housing challenges faced both here in Saint John and throughout Canada," said Reardon.
"As a small city with a big heart, we have to be bold and we want to grow. And I'm going to use your father [former prime minister Pierre Trudeau's] line and I'm going to say, 'Just watch us.'"
This marks the 22nd Housing Accelerator Fund announcement the federal government has made across the country.
In November, Moncton received $15.5 million to help accelerate about 490 units over three years.
Saint John had applied for about $15 million to help build 1,200 over three years.
Asked how the federal government decided how much to give each municipality, Trudeau replied: "There is a lot of hard work and a lot of partnership going into looking at what could actually be done, what is the right level.
"We came down with an agreement around $9.18 million for the Housing Accelerator Fund, which we feel is the right level to really enable Saint John to accelerate to get more homes built faster, to get people into those homes in an affordable way, and we're really pleased with that announcement."
The $4 billion Housing Accelerator Fund, which continues until 2026-27, is expected to fast-track at least 100,000 new homes for people in towns, cities, and Indigenous communities across Canada over the first three years. It's part of the national housing strategy.
The federal government is also working to help developers,Trudeau noted. It has increased the loan programs to $60 billion from $40 billion to help with financing of rental constructions, is taking the GST off new apartment building construction, and working on bringing inflation down.
Grants, roads and 'red tape' cuts part of Moncton's plan with $15M federal housing funds
City says money should result in almost 500 more housing units over 3 years
Moncton will receive more than $15 million from the federal government over three years, money the city says should result in almost 500 more housing units being built in the city.
"Today is a fabulous day," Moncton Mayor Dawn Arnold said after a news conference in the city hall lobby Thursday morning.
The money will be used for various grant programs for home builders, to help cover the cost of building new roads to open areas for development, and to ease the development approval process.
The funding was expected after council votes last month and on Monday, but the amount was almost $2 million more than previously described and more details were released about how it will be used.
The city applied for the funding through the housing accelerator fund. The $4-billion program introduced in last year's federal budget runs until 2026-27 and is intended to speed housing construction across the country.
In Moncton, the city anticipates the $15.5 million it will receive will result in construction of 490 additional housing units over three years.
Bill Budd, the city's director of planning and development, outlined
details of the city's plan to reporters Thursday. (Shane Magee/CBC)
Bill Budd, Moncton's director of planning and development, told reporters that city council will be asked to approve various new programs in the coming weeks and months to meet that target.
He said one grant program would provide $20,000 "per door" for up to 15 units, to a total of $300,000.
"So we think in the downtown this will accelerate up to 10 high-density projects that are currently stalled," Budd said.
He didn't name those 10 projects but said several already have planning or city council approvals and are stalled because of higher costs to build from interest rates and other factors.
A $10,000 grant is proposed to encourage homeowners to add basement apartments or garden suites, a second housing unit on a residential lot.
The funding will also help cover the city's cost to build new roads. One area would be a street from Mountain Road near the New Brunswick Community College west into an 85-acre area where Shannex is building new nursing homes that Budd said is now "landlocked."
Another area would be a new road from Harrisville Boulevard into a neighbourhood around École Champlain.
"We think there's six or seven projects waiting for this infrastructure and it should take off," Budd said.
A 15-storey building under construction in downtown Moncton last year. (Shane Fowler/CBC)
Other steps using the funding are expected to help reduce what Ginette Petitpas Taylor, the MP for Moncton–Riverview–Dieppe, described as red tape.
Budd said city staff will propose ways to remove barriers to construction and streamline the zoning bylaw.
"We're introducing a first phase of that at Monday's council meeting to create more as-of-right housing and avoid having to go through unnecessary discretionary approval processes," Budd said.
Statistics Canada has reported that the Moncton region is one of the fastest-growing metropolitan areas in the country.
An urban growth strategy, looking at where housing should be built in the future, forecasts the city's population will reach 116,200 by 2046, a 44 per cent increase over 2021.
But those projections were based on older figures and don't account for more recent growth.
That growth is driving home prices higher as the area has a low apartment vacancy rate and climbing rental costs.
Arnold acknowledged the money and new units wouldn't be enough to meet the demand in the community.
"Oh, it's absolutely not enough, no," she said. "But it is a really good start to get things going."
Ginette
Petitpas Taylor, the MP for Moncton–Riverview–Dieppe, announced the
federal funding agreement with the city on Thursday. (Shane Magee/CBC)
Budd said the city normally sees about 670 housing units built a year. With the funding, the city hopes this will increase about 10 per cent.
Last month, council voted on several steps the federal government required before finalizing the funding agreement.
One included directing city staff to propose amendments to bylaws that would allow four unit-dwellings in all residential zones across the city.
If eventually implemented it's a measure that could affect areas of the city zoned to only allow one or two units.
Canada
and Moncton flags were on display for the federal funding announcement,
with a New Brunswick flag kept around the corner. The premier has
suggested a law blocking funding agreements like the one announced
Thursday. (Shane Magee/CBC)
Moncton was among 49 communities in the province that applied for the housing accelerator funding and the first New Brunswick agreement announced.
New Brunswick Premier Blaine Higgs suggested to Brunswick News this month that the province could introduce a law blocking federal housing funding from going directly to municipalities.
Asked about those comments, Moncton's mayor said she was excited that the premier was thinking about affordable housing.
"I would welcome him to match the funds that the federal government has invested today," Arnold said to reporters.
In a statement Thursday afternoon, Higgs said bypassing the provincial government isn't a solution.
Moncton says it expects the first federal payment, about 25 per cent of the total, to arrive soon.
"We'll be working closely with the city to make sure that they're going to be meeting their targets," Petitpas Taylor told reporters. If they do, further funds will be released.
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