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Uzelman: Causes of housing crisis are clear to all but politicians

A column by Bruce Uzelman

With the exception of Canada’s indigenous peoples whose forefathers have inhabited this land for millennia, Canadians have descended from immigrants or were immigrants themselves. Migrants today come here for the same reasons that our ancestors did or we did: some to escape war, persecution or deprivation, and all in search of security, prosperity and a better life. This, perhaps, has fostered Canadians’ positive perception of immigrants and immigration.

Polls show that Canadians recognize the contributions of immigrants. A Leger survey found that 76% of respondents believe immigration significantly contributes to our cultural diversity. A majority believe that younger immigrants contribute to the workforce, to the tax base and to supporting older Canadians, and that immigration is necessary to combat labour shortages.

Canadians also have a balanced view of immigration; they understand that too much immigration can have negative outcomes. Leger says 75% believe, “the increase in immigrants” is contributing to the housing crisis, and 58% believe it is contributing to the affordability crisis.

Immigration and temporary resident numbers in 2022 were the highest in Canadian history. Federal statistics detail a total of 438,000 permanent residents admitted to Canada, and a total of 550,000 student study permit holders, and 604,000 work permit holders. From 2018 to 2022 immigration grew by 36%, student permits increased by 55% and work permits by 80%. (From 2018 to 2021 arrivals increased steadily, and in 2022 dramatically.)

The Leger poll (released November 28) showed that 27% of Canadians believe “current levels of immigration” have a net positive effect on the economy, while 45% believe they have a net negative impact. Leger’s data shows that since March of 2022, those who said Canada should admit more immigrants declined, while those who said we need fewer immigrants grew. That is not surprising, given that affordability and housing stresses have become more evident.

Many supply issues contribute to the housing crisis. Governments are now addressing these problems. But growing demand, fueled by rapid population growth, is also an important cause of the crisis. Canadians clearly recognize that. Yet, the federal government continues to admit record numbers of immigrants and temporary residents, and illogically plans to again raise immigration rates in 2024 and 2025. Why?

In part, the explanation is ideological. The Liberals regard robust immigration as progressive, and therefore desirable. In part, the Liberals may be trying to distract from their failure to boost living standards by increasing the number of workers and the size of the economy. Just growing GDP does not improve our real income; the real GDP per capita of the pre-pandemic era still has not been restored. We simply have a larger population sharing a slightly bigger pool of income.

Pierre Poilievre and the Conservatives, like the Liberals, do not address the need for reducing population growth. In a well-produced documentary (“Housing Hell”) watched by millions of Canadians, Poilievre convincingly diagnosed supply issues holding back housing construction. He did not even mention excess demand.

The leader of the opposition is likely concerned with offending the nearly one quarter of Canadians who are immigrants, and is wary of the Liberals framing him as anti-immigrant. Prime Minister Trudeau would like nothing more than to be gifted with another wedge issue. Still, sooner or later, Poilievre will need to deal with the elephant in the room. He is lauded as a master communicator. He needs to figure it out.

In no way are recent immigrants responsible for the affordability and the housing crises. Rather, present immigration policy, and the false notions it is based upon, are at fault.

Government policy, seeking to attract ever larger numbers of people from afar, can only fail. Structural economic problems - insufficient investment, deficient research and development, and low productivity - are at the root of Canada’s weak economic growth and non-existent income growth. We have to solve those problems here, within Canada.

As for sound immigration policy, it adds only the number of new residents Canada can productively employ, can suitably house and can provide with essential goods and services.


Bruce W Uzelman, based in Kelowna, holds interests in economics and political science.

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