ANALYSIS: As Canada’s Population Hits 40 Million, Economists Warn of Strain on Housing Market, Health System

Minister of Immigration, Refugees, and Citizenship Sean Fraser rises during question period in the House of Commons in Ottawa on Nov. 26, 2021. The Canadian Press/Patrick Doyle

As Canada’s population reaches the milestone of 40 million people, economists and housing experts are warning that accelerating immigration numbers could strain the country’s housing market and health-care system.

“My first reaction is that it’s great for the people coming to the country, but maybe it’s not so great for the people in the country,” Frank Clayton, a senior research fellow at the Centre for Urban Research and Land Development at Toronto Metropolitan University, said in an interview.

“It’s putting so much pressure on our infrastructure, whether it’s housing or hospitals or whatever, it seems that we’re not prepared for it.”

Canada’s population reached the 40 million milestone on June 16. With a record 1.06 million newcomers in 2022, the country leads the Group of Seven in population growth. Because the population continues to age and fertility remains below the replacement level, immigration was the main driver of population growth, accounting for 96 percent of all growth in 2022, according to Statistics Canada.

In November 2022, Immigration Minister Sean Fraser announced a new plan that would see Canada bring in 500,000 immigrants per year by 2025, citing the need for newcomers to address labour shortages and demographic shifts that threaten the country’s future. According to Immigration, Refugees and Citizenship Canada, the country is poised to take in 465,000 new permanent residents in 2023, 485,000 in 2024, and 500,000 in 2025.

Clayton said while population growth is good for the economy, he raised concerns about the federal government’s inadequate planning when it comes to the infrastructure needed to support new immigrants. He said this often results in municipalities like Toronto, Montreal, and Vancouver—which are the top destinations for new immigrants—shouldering the burden of trying to accommodate them.

“It’s just overwhelming for where those people go ... there’s no planning for the infrastructure,” Clayton said, citing numbers from Statistics Canada that showed Toronto’s population grew by over 138,000 people in 2022.

“How many hospitals do you need for 100,000 people? Where’s the housing for these people?”

Housing Shortfalls

Bill Tufts, founder of Fair Pensions For All, an advocacy group focusing on public sector pension and compensation issues, said he believes immigration is good for Canada. But he is concerned mass immigration will bring “massive” economic problems for the country, especially when it comes to housing.

According to the Canada Mortgage and Housing Corporation’s (CMHC) 2023 Housing Market Outlook report, rental affordability is set to decline due to demand outstripping supply over the next year, with “significant drops in housing starts” in the provinces of British Columbia, Quebec, and Ontario. The CMHC said in 2022 that to restore housing affordability, an additional 3.5 million affordable units will need to be built by 2030.

Tufts said that with an average of 2.1 people per dwelling in Canada, in order to accommodate the influx of immigrants from 2022, a total of 667,000 additional housing units would need to be built. However, there were only around 260,000 housing starts created last year, and the CMHC has said the number in 2023 is expected to be lower.

“That leaves a huge, significant shortfall of housing requirements. It’s bigger than the total housing population of Vancouver, which has about 338,000 housing units,” he told The Epoch Times.

“Obviously something’s got to change, [such as] housing density where you all of a sudden have housing density of four or five people per home.”

Tufts noted that the number of people who came to Canada in 2022 is nearly as big as the population of Calgary. “How many years did it take to build the infrastructure—all the houses, roads, hospitals, schools, commercial, shopping, health care facilities to accommodate them?” he said. “And they’ve jammed that in in just one year?”

Economy

David Amborski, a professor at Toronto Metropolitan University’s School of Urban and Regional Planning, said high immigration levels benefit Canada by bringing in the necessary workers to drive the economy, but he acknowledged it also puts stress on the housing market, health-care system, and schools.

To offset these strains, Amborski said there will need to be adequate certification processes to allow immigrants to become doctors, nurses, construction workers, and teachers.

“We have to look at bringing people in with those skill sets across the board. You want to make sure that some of the immigrants coming in have the skills to meet the needs that are created by increased population,” he said in an interview.

“The immigration numbers are pretty high, but it depends if you’re bringing in people with the skill sets that will spur the economy. If you can meet the needs of the increased population, then it makes sense, but if you’re ignoring those kinds of skill sets, then [that] doesn’t make sense.”

Kevin Milligan, an economics professor at the University of British Columbia, said it’s better for Canada to have a growing population than a declining one, such as countries like Japan or China.

“There are certainly challenges that arise when we have immigration—of integration, challenges of the housing market, which we’re certainly seeing now,” he told The Epoch Times. “But I'd rather [have high immigration] when we have a booming demand for labour like we have right now, than when we have a big unemployment problem,” he said.

A Statistics Canada analysis from May challenged the appearance of widespread labour shortages in the aftermath of COVID-19, showing there were no labour shortages for jobs that require high levels of education. The report suggested that other factors, such as a mismatch in skills and pay, could be the reason behind the high number of vacant job positions.

As for the government’s emphasis on student visas, Milligan said there are few downsides to allowing a “whole bunch of young, ambitious, well-trained, smart people” to come to Canada. However, the immigration numbers have put stress on many cities’ housing markets, he said, something all levels of government need to work on together to remedy.

Milligan said he and some other economists have expressed “caution about whether we’ve gone a bit too far too fast, especially on the student visa issue and the stress it has on some areas of Canada.”

“I think it is a fair set of questions to ask: are we going too fast, too quickly?” he said. “My sense is that we’re getting close to [the end of] our ability to absorb right now. I wouldn’t want to go an awful lot faster.”