A new home is displayed for sale in a new housing development in Ottawa on Tuesday, July 14, 2020. Prospective buyers have lamented the torrid pace Canada's real estate market has moved at in recent years, but many feel 2023 may be the year their luck changes. THE CANADIAN PRESS/Sean Kilpatrick

Uzelman: Housing affordability- Immigration needs to be coordinated with housing supply

A column by Bruce Uzelman

~BW Uzelman


Federalism functions best where powers are clearly divided between the federal and provincial levels of government. Where jurisdictions are clearly the purview of one level or the other – like defense at the federal level or education at the provincial level – it is less likely for disputes between the two levels to develop. It is also more difficult for governments to duck accountability.

However, actions under federal jurisdiction can still extensively impact a policy area under provincial jurisdiction. Where it does, ineffective policy can result. That is the case with immigration and housing. Immigration is a federal power, but greatly influences the demand for housing. Housing is primarily under provincial jurisdiction. The two levels of government also have failed to coordinate immigration levels with housing growth. This has contributed to the housing shortage and affordability crisis.

Steve Lafleur and Josef Filipowicz wrote a study for the Macdonald-Laurier Institute, “Getting our houses in order: How a lack of intergovernmental policy coordination undermines housing affordability in Canada”. The report examines how immigration policy and housing supply policy are “misaligned”.

The report states, “Many factors have contributed to eroding housing affordability, but the fundamental problem is a growing mismatch between demand and supply.” The authors support this statement with data. Average population growth has increased from under 300,000 per year in the 1970’s to nearly 400,000 per year in the last decade. Average housing completions have slightly decreased, sitting at roughly 200,000 per year over the same period. The growing gap between demand and supply, say Lafleur and Filipowicz, “is compounded by decades of underbuilding.”

The authors note that, since the 1990’s, immigration has replaced net births as the primary driver of population growth. Their data shows that in 2021-2022, both immigration and admission of non-permanent residents (including temporary foreign workers) increased dramatically from the low levels shown early in the pandemic. About 500,000 immigrants came to Canada in 2021-2022, while about 200,000 non-permanent residents were admitted. Net births continued to decline to about 50,000. Federal immigration targets range from 465,000 in 2023 to 500,000 in 2025.

The report also points out that, surprisingly, the availability of housing is not considered in federal-provincial immigration agreements. However, some provincial leaders have begun to comment on the “misalignment” between immigration levels and housing construction. The BC Housing Minister, say the authors, “called upon the federal government in January, 2023 to ‘actually tie immigration numbers to affordable housing targets as well as new housing starts’”.

The BC Government has developed an innovative system to better manage housing supply. The Housing Supply Act enables the government to provide housing targets to municipalities. Targets will begin to be assigned in 2024, apparently where shortages and affordability are most severe. The act seems to resolve Lafleur and Filipowicz’s objections to current growth planning, that is “lengthy, poorly anticipates demand and is poorly enforced”. The targets are provided annually, so are regularly adjusted, and the province can require the municipality to enact or amend a bylaw or to issue or decline a permit.

However, there remains no process to coordinate demand with supply. National immigration targets are not matched with provincial housing supply or housing targets. To admit more immigrants and non-permanent residents than we can house is not rational. The consequences are not acceptable. Both the migrants and existing residents will face housing shortages and lack of affordability. The federal government, in setting immigration targets, clearly needs to consider the ability of the provinces to house them.

Lafleur and Filipowicz sum it up, “Without better coordination, the housing crisis will likely get worse.”

Next week: Housing affordability – Part 2 – A look at provincial and municipal constraints on housing supply.


Bruce W Uzelman

I grew up in Paradise Hill, a village in Northwestern Saskatchewan. I come from a large family. My parents instilled good values, but yet afforded us, my seven siblings and I, much freedom to do the things we wished to do. I spent my early years exploring the hills and forests and fields surrounding the village, a great way to come of age.

I attended the University of Saskatchewan in Saskatoon. I considered studying journalism at one point, but did not ultimately pursue that. However, I obtained a Bachelor of Arts, Advanced with majors in Economics and Political Science in 1982.

Contact: urbangeneral@shaw.ca

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