Immigration is an undeniable contributor to our challenges with housing affordability. All levels of government campaign on plans to improve housing affordability while the Federal Government simultaneously pursues aggressive immigration numbers. Why don’t the Feds dial back their immigration targets?
I’ve been learning what I can from a variety of economists and they all refer to the demographic balance required to sustain a national economy. Many Western countries are facing an unprecedented cycle where the older generation (50+) will outnumber those in the workforce. Canada’s birth rate hasn’t come anywhere close to the replacement rate (essentially every individual replacing themselves) since the baby boom. Simply put, we don’t have enough people in the workforce today to pay for retirees and there are even fewer people in the queue for the next 10-15 years. The good news is that population projections look pretty good after that (the end of the baby boom population-dominance). We need to weather the storm.
Take a look at Stats Can’s Age Pyramid if you’d like a visual: https://www12.statcan.gc.ca/census-recensement/2021/dp-pd/dv-vd/pyramid/index-en.htm
Canada’s Immigration Objectives
Canada’s solution is to attract immigrants who are young professionals. These are educated people who go directly into the workforce and contribute to the tax base long enough to make their contributions a net gain to the Federal Government. It doesn’t matter how much harm it does to the housing market. Canada needs the tax revenue. We need employable immigrants. They need to live where the jobs are. Housing competition will persist in Canada’s major cities.
I wish the government would just come out and say this, but that’s not how politics works. They pursue headlines that speak to your needs. They roll out a ‘foreign buyer ban’ to get the headline and then they add endless exceptions so the economy persists. They add first time buyer incentives that are seldom used and not terribly helpful. Quietly, the government (regardless of the party in power) is pursuing long term economic viability while shouting loudly about what they’ve done to help your short term goals.
I might be wrong. Tell me if you see flaws in this line of thinking. It feels to me that we need immigration, despite the added pressure it puts on housing.