Many Canadians grappling with skyrocketing rent and home prices are being led to believe that an influx of immigrants outpacing the construction of homes is causing the crisis.
But that’s not true. The real issue is that investors and builders are building fewer homes to keep prices high.
Nonexperts have pointed to a rise in numbers for two main groups of migrants — those who are granted permanent residency status and eventually can become citizens; and those coming here on temporary work or study permits.
On the permanent resident side, commentators highlight a seemingly abrupt 26 per cent increase between 2019 and 2022 as a reason for the housing crunch. But this surge is a correction for the 150,000 permanent immigrant shortfall in 2020 due to COVID-related border closures. To catch up, permanent immigration was increased by about 50,000 people a year-in 2021, 2022 and 2023. There has been no sudden increase in the rate of permanent immigrants during the period in which the housing crisis suddenly became apparent.
Claims by economists that Canada’s plan to bring half a million permanent immigrants in 2025 will require that many new homes also lacks context. In 2022, 35 per cent of all permanent residents were migrant workers, students and refugees — already in Canada, already housed — transitioned from temporary status. In 2021 it was over 47 per cent.
That is to say, between a third and a half of new permanent residents are not new arrivals needing new housing.
Canada announced an annual permanent immigration target of one per cent of the population in 2017. There has been no sudden increase or shift that caught homebuilders by surprise.
There has been a steady increase in temporary workers since 2008. Even though employers want more workers, Canada has refused to bring in these low-wage essential workers as permanent immigrants. And so today there are three times more new temporary permits than permanent residency permits issued each year. And the gap is growing. Temporary residents have fewer rights, face exploitation, denial of services and family separation at an unprecedented rate. This is why we at Migrant Workers Alliance for Change have been calling for permanent resident status for all.
There was a 30 per cent increase in valid temporary foreign work and study permits between Dec. 31, 2021 and Dec. 31, 2022. But zoom out a little, and remember COVID, and the increase becomes less startling. The number of temporary permits dropped eight per cent in 2020, down from an average 13 per cent year over year increase for the previous four years. Had COVID not happened, temporary migrants in 2022 would have reached 1.65 million. That is 50,000 more than were actually present in 2022. The current numbers are not an unexpected surge.
Note that the majority of temporary workers and students are housed by their employers — bunkhouses for agricultural workers, hotels for workers in tourism, etc. Similarly, international students are in campus housing, or are living in cramped conditions, with five students in a home built for one.
Migrants are not competing for housing in the same way as citizens. Most of the housing discussions focus on idealized notions of housing and the people who live in them and don’t factor in the struggle of migrants and new immigrants. Low-waged migrants are not buying single-family homes.
While housing supply may not be keeping pace with population growth, the primary culprit is not immigrants but rather a decline in investment in construction.
A study by the Canadian Centre for Policy Alternatives in October 2023 revealed a 21 per cent decrease in investment for new single-family homes since April 2020, and a 36 per cent decrease since interest rates were hiked starting in 2022. The reason? Increased interest rates mean less profits.
Many of us are struggling with rental prices, up an astronomical 20 per cent over the last two years, and housing prices, which are up 6.3 per cent in the last year.
Capping immigration won’t change this dynamic.
Investors and builders will keep housing supply below what we need in order to increase their value and profits.
Throwing more money in subsidies and tax breaks at the already incredibly rich speculators isn’t working. If we accept that housing developers have just failed to keep building at what is truly a predictable rate of growth in migration, they have been asleep at the wheel, and we need to make sure that doesn’t happen again.
Canada has an immigration crisis, but it is separate from the housing crisis. Migrants need rights and permanent resident status, and the government must get back into the business of building homes.
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