The Canadian population is aging, with people living longer but having fewer children. To counteract the effects of an aging population, Canada aims to reach a population of 100 million by 2100. With a current population of 38 million, this goal requires an ambitious immigration program.
The Northern Opportunities
Canada has three northern provinces that occupy nearly 40% of the country’s territory but are sparsely populated. The government seeks to attract immigrants to these regions to protect and exploit the economic, tourism, and commercial potential they offer. The melting Arctic also presents opportunities for new shipping routes and the exploitation of oil and gas reserves.
The Southward Attraction
However, most immigrants prefer to settle in the southern regions close to the United States, where job opportunities and a higher quality of life are available. Ontario and Quebec alone house 60% of the Canadian population. This concentration of immigrants in certain cities poses a challenge as the demand for housing outpaces construction.
The rapid influx of immigrants has led to a shortage of housing and a subsequent increase in rental prices. In Toronto, where one-third of immigrants settle, rents have risen significantly, making it unaffordable for many newcomers. The housing bubble of 1981 was the last time Canada experienced such difficulty in buying a home, not seen again until 2022.
Rising Prices and High Interest Rates
The COVID-19 pandemic further exacerbated the housing crisis as central banks worldwide lowered interest rates, making borrowing cheap. This prompted individuals, including high-income families, to take on debt to purchase properties. Consequently, housing prices soared across the globe. In Canada, the combination of high inflation rates and increased interest rates made homeownership unaffordable for many Canadians.
Restrictions on Foreign Buyers
To address the housing crisis, the Canadian government enacted a law in 2023 prohibiting foreigners from buying residential properties for two years. While this move aims to reduce demand and stabilize prices, foreign investors have not been significant contributors to the real estate market. Instead, the government should focus on increasing the supply of housing through construction, a more challenging task due to restrictive zoning regulations.
The Way Forward
If Canada wishes to continue attracting millions of immigrants, it must address the housing crisis by promoting the construction of new housing units. Simply restricting foreign buyers is not a long-term solution. By creating laws that increase the supply of housing and exploring ways to overcome zoning restrictions in cities, Canada can provide affordable housing for both its current residents and newcomers.
Canada’s ambition to reach a population of 100 million is admirable, but sustainable growth requires a comprehensive approach that prioritizes the housing needs of its citizens and immigrants alike.