Canada needs to build 50 per cent more homes as Ottawa plans for higher immigration levels: report
CTV
As Canada prepares to ramp up immigration levels, a new report says the country will need to build 50 per cent more housing than what's already being planned.
As Canada prepares to ramp up immigration levels, a new report says the country will need to build 50 per cent more housing than what's already being planned.
The report, published by economists from Desjardins on Monday, says in order to keep up with the federal government's immigration targets without causing substantial increases to home prices, 100,000 more homes need to be constructed annually in 2023 and 2024.
"Increasing the housing supply beyond the typical demand response would also take pressure off prices but requires extraordinary policy intervention and resolve," the authors wrote. "Indeed, we estimate that housing starts would have to increase immediately by almost 50 per cent nationally relative to our baseline scenario and stay there through 2024 to offset the price gains from the increase in federal immigration."
Last fall, Ottawa unveiled plans to increase the number of immigrants entering Canada, with a goal of 500,000 newcomers arriving per year by 2025.
The report notes that the federal government's target of 100,000 new housing units over the next five years falls short of the 100,000 new homes needed annually. However, the Ontario government aims to get 150,000 new homes built per year in the province with Bill 23, also known as the More Homes Built Faster Act.
Ontario's target of 150,000 new homes per year is far more than the 100,000 per year that Desjardins says is needed across the entire country. If the province can meet this target, the report says this could have a "disproportionate offsetting impact on the average home price in Canada."
The impact of immigration on housing affordability also depends on where newcomers decide to move. If newcomers predominately move to the Prairies, the authors say this would put less pressures on housing prices in areas where affordability is already stretched. Desjardins also says the Prairies are expected to have "the best performing economies in Canada" and having more immigrants move to these provinces "would support higher economic growth there and nationally."
