Opinion: Canada’s ambitious immigration plan demands an unprecedented home-building effort

Nov 30 2022, 7:35 pm

Written for Daily Hive Urbanized by Mark Sakai, the Advocacy Projects Manager of the BC Real Estate Association.

Last year, Canada welcomed a record-breaking 405,000 new immigrants. In the years ahead, the federal government is expected to shatter that record with an ambitious plan to bring in 500,000 immigrants per year by 2025.

With an aging labour force and over one million vacant jobs across the country, Immigration Minister Sean Fraser’s plan demonstrates that attracting newcomers will continue to be a vital part of the federal government’s strategy to manage the social and economic challenges Canada will face in the decades ahead.

While there are questions about whether the targets are pragmatic and achievable — one thing is certain: Canada must address the housing crisis if we want to continue to grow.

It’s clear that the Canadian economy needs immigrants to sustain national growth. Once they arrive, however, immigrants, like all Canadians, need a place to call home and thrive.

But where will they all live?

On the federal level, a recent Scotiabank report depicted Canada as having the lowest number of housing units per capita of any G7 country — and that number has been falling since 2016. Just to return us to the 2016 level, it would require an additional 100,000 units of housing, and that would still leave us below the G7 average.

Provincially, British Columbia needs an additional 570,000 homes by 2030, which is well beyond the expected level based on current completion rates, according to a recent Canada Mortgage and Housing Corporation (CMHC) report.

With a 2024 immigration target almost 100,000 people above the 2021 level, this will equate to rapidly increasing housing demand and a long-term undersupply of housing units.

In terms of domestic housing demand, the market is currently taking a bit of a temporary breather due to aggressive tightening by the Bank of Canada. However, higher interest rates bring inflation down, potentially pushing the economy into a brief recession, and interest rates are likely to fall, kickstarting a new round of higher demand. Resurgent demand, combined with a significant uptick in immigration, will place renewed pressure on home prices if supply remains inadequate.

What is the solution? The writing is on the wall: we must build new housing supply, both market and non-market, ownership and rental — and we must act now.

So how can we ensure that we are building enough housing to meet the increasing demand?

First, we need strong leadership from the federal government. Ottawa needs to create bilateral infrastructure agreements with provincial and territorial partners to incentivize the creation of more housing supply.

Specifically, infrastructure funding should be linked to goals such as increasing the density of housing, revising zoning laws, and speeding up planning and approval processes.

Second, we need municipal governments across the country to collectively step up. Local governments need to streamline the slow, bureaucratic approval process in their communities. This goes for all types of new housing: market strata apartments and townhouses, multiplex housing in single-family zoned areas, non-market rental apartments and townhouses for families, singles, and seniors, and an expansion of non-traditional forms such as co-ops and co-housing.

To his credit, BC Premier David Eby’s recently passed Housing Supply Act is a strong first step to hold municipalities accountable for meeting the housing needs in their communities.

Third, we must address the labour capacity issue in the construction sector — otherwise, it may not even be logistically possible to build the numbers of new housing that we need to prevent another overheated market.

The truth is that all three levels of government need to work collaboratively with key stakeholder groups to embark on an unprecedented home-building effort. Canada has the opportunity to act proactively, and we must demand action from our elected representatives now.

It’s our collective responsibility to act now to prevent the next housing crunch. It will require federal infrastructure investments, strong densification incentives around public transit nodes and frequent service corridors, streamlined housing approval processes and zoning revisions, as well as empowering our construction sector.

In the years ahead, the opportunity to build a better life will give millions of new Canadians a reason to come to Canada. We must also build a vibrant and sustainable housing sector in our communities to give them a reason to stay.

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