Fri. Mar 1st, 2024

Analysis | Immigration and housing crisis: nuances are required

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While it is normal to wonder about the repercussions on demand of a rapid increase in population, it is just as important to talk of the effect of a reduction in immigration thresholds on economic growth. (Archive photo)

  • Gérald Fillion (View profile)Gérald Fillion

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Listening to the public debates these days, immigration is responsible for the housing crisis! While it is true that the increase in population puts pressure on access to housing, the direct link between immigration and the housing crisis is too short. We absolutely must return to the facts: immigration is not primarily responsible for the crisis. And without immigration, there is no more economic growth.

While it is normal to wonder about the repercussions on demand of a rapid increase in population, it is just as important to talk about the effect of a reduction in immigration thresholds on economic growth. For what? Because the increase in GDP is based, year after year, on productivity and population growth.

However, productivity is low in Quebec and across Canada. It is also urgent to invest in innovation and research to increase it. Until results finally appear, population growth remains essentially the only vector of growth in the economy.

We see this in the latest data from the Canada Mortgage and Housing Corporation (CMHC): stronger growth in immigration has an effect on demand, and therefore, on rents and accessibility to housing. accommodation. But it must be emphasized and remembered that it is not the sharp increase in immigration which is the primary cause of the housing crisis.

The CMHC also confirms this in the report published Wednesday. Let’s take the vacancy rate on the island of Montreal, the place that welcomes the vast majority of immigrants. In 2023, this rate was 1.6%. In 2019, how much was it? Also at 1.6%. However, demographic growth was clearly stronger in 2023 than in 2019.

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In 2019, Montreal received nearly 40,000 international immigrants and more than 50,000 non-permanent residents. However, last year, the city received nearly 60,000 international immigrants and nearly 150,000 non-permanent residents.

It's clear: the increase in immigration is currently creating additional pressure which should not be neglected. The average rent for a two-bedroom unit in Canada climbed 8% in 2023, according to CMHC, to $1,359. In Montreal, the increase is 7.9%, the largest increase since at least 1990, to $1,096 on average.

But CMHC data also confirms that the crisis of access to housing already existed before the pandemic and before the marked acceleration in immigration levels in Quebec and across Canada.

The basic problem is more the insufficiency of construction, the inability of governments to complete structuring affordable housing projects, over the years. And the rise in interest rates over the past two years has not improved the situation.

Should we build more than a million housing units in Canada because Canada welcomed more than a million permanent and temporary immigrants in 2023? Obviously, the answer is no.

Canadian households consist of an average of almost 2.5 people. At this rate, that would mean 400,000 to 500,000 new homes are needed to accommodate everyone. This is considerable, but it is important to put into context the comparisons we make between the growth curves for housing starts and the population.

No two households are alike. Families of four, six or eight people can immigrate to Canada and will live in the same place. Other people arrive alone and look for accommodation. This is often the case for foreign students who, overwhelmingly, find themselves in apartments. Population growth is therefore multiple.

In a recent CBC text, researcher David Hulchanski, professor specializing in housing and community development at the University of Toronto, said that the current growth in housing starts was sufficient to meet the increase in the number of permanent residents.

But the sharp increase in the number of temporary immigrants is changing the situation. The reduction announced by the Government of Canada in the number of foreign students, who are part of this immigration category, could alleviate the current demographic pressure on access to housing. However, the effects of this reduction will take a few years to be felt. And upward pressure on rents could remain strong in the meantime.

Quebec has had 9 million inhabitants for a few days. It is calculated that 810 people are added daily to the province’s population. However, natural increase (births minus deaths) only brings 29 people per day. Almost all of this growth comes from immigration. See the numbers.

+ 625 non-permanent residents

+ 181 immigrants

+ 87 residents of other provinces

+ 29 natural increase (births minus deaths)

– 112 Quebecers who leave for #x27;other provinces or countries

Source: Statistics Canada

The latest annual demographic data available are those for the year 2022. As you see in the diagram of the Quebec Demographic Report, the increase in the population has come mainly international migration.

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The increase in Quebec's population in 2022 came from international migration, according to data from the Institute of Quebec statistics.

The subject of immigration is strongly looming large in the political debate these days. Some politicians make direct links between housing problems and the increase in the number of asylum seekers, foreign students, temporary workers and permanent residents. The most impactful expressions are used: mass immigration, loss of control, ideological delirium or breaking point.

This is where it seems important to me to return to the economic and demographic reality of Quebec. While it is relevant to question the carrying capacity – say the capacity for infrastructure, housing and public services – it is equally essential to ask where economic growth will come from.< /p>

Polls show Canadians are increasingly concerned about rapid immigration growth. It is therefore important to address this issue factually, to explain the demographic and economic reality to citizens. Economic growth is weak, we have to pay for our public services for an aging population whose needs for services are only growing. The contribution of immigration is crucial, in this context, for the economic well-being of Quebec.

It is just as important, moreover, for the federal government to take into account the issues of supply and demand in welcoming immigrants to the country.

We cannot, on the one hand, deny the contribution of immigration on the economic level. And we cannot, on the other hand, create an imbalance in the supply of services and housing by rapidly accelerating the reception of immigrants. We cannot reduce housing problems to the growth of immigration alone. All governments, all politicians, must handle this issue responsibly.

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