A number of good articles questioning current immigration policies, given their impact on housing, healthcare and infrastructure. While the change in immigration minister from one with an Atlantic perspective in favour of more immigration to a Quebec minister, more attuned to some of Quebec concerns on levels, may or may not indicate a shift from the “more is merrier” approach to a more intelligent approach that factors immigration impacts on housing, healthcare and infrastructure. We shall see.
Certainly ironic to see Minister Fraser shuffled to housing where he will have to address some of the problems he exacerbated:
If Canada’s population boom continues at its current frantic pace, interest rates will face upward pressure and the massive influx of people will significantly worsen affordability for homebuyers and renters, a new report from TD Bank warns.
And the bank’s economists are calling on the federal government to restore “balance” to its immigration policies.
Over the past 12 months Canada’s population surged by 1.2 million, driven by higher annual targets for permanent immigration but also a swell of non-permanent residents such as temporary foreign workers and international students.
That rapid growth has helped employers fill job openings and propelled Canada to become the fastest growing economy in the G7, but it is also causing “dislocations in other segments of the economy,” including the housing market, health care, social services and infrastructure, that threaten to undo the benefits, the report’s authors warn.
The population jump caught economists off guard, raising the question of whether it will be repeated. Based on the pace of TFW program usage and study permits in 2023 so far, TD said Canada’s population is likely to increase by another one million people this year.
If that happens, the gap between housing supply and demand would grow to 500,000 units through 2025, the report said, adding that even with aggressive policies in place to boost home construction, supply would not keep up.
The result would be an erosion in affordability for buyers and renters, a situation that would be made worse by the upward pressure a persistent high-growth immigration strategy would put on interest rates, the report said.
According to TD, if Canada’s population boom continues, the neutral interest rate – which is sometimes described as the Goldilocks level of interest that neither stimulates economic demand nor holds it back – will need to rise by 50 basis points, or half a percentage point, compared with under earlier assumptions about how Canada’s population growth would unfold.
“The implication is not only do you have a higher run rate on interest rates, but when you get into the position of cutting interest rates it would put a higher floor for how low you would go,” Beata Caranci, chief economist at TD and one of the report’s authors, said in an interview.
“The Bank of Canada is trying to push a boulder up the hill when it comes to inflation, because as it increases interest rates, the sheer size of the population keeps generating demand that outstrips supply.”
For its part, the Bank of Canada has said little about whether therapid population growth is affecting monetary policy, though earlier this month, after the bank raised its key overnight rate by another 25 basis points to 5 per cent, Governor Tiff Macklem said on balance the effect is “probably roughly neutral.”
On the one hand, immigration has reduced pressure on the labour market and eased costs for employers, he said, while on the other, “these new entrants in the economy, they’re also new consumers, they’re renters, they’re new homebuyers, so it’s also adding to demand.”
Ms. Caranci said a jump in population like Canada has witnessed wouldn’t be such a problem if there was a similar surge in productivity; however, the country’s track record on that front is not promising. And what she called the “government guarantee” that it will bring in new workers to fill labour gaps only reduces the incentives companies have to invest in technology that would make them more efficient.
Rather than view immigration as the “be-all and end-all solution” to Canada’s aging work force, the TD report urged policy makers to focus on reforms that would remove barriers to the work force for people already here, giving the example of how flexible work arrangements and the expansion of daycare has lead to a big jump in the number of mothers with young children taking jobs.
Measures aimed at making medical and engineering credentials more transferable would also allow recent immigrants who are underemployed to fill critical gaps in the labour force, it added.
“If the purpose was to put a stop-gap in what was an extreme shortage of labour revealed by the pandemic, at some point you have to take your foot off the gas and let the supply side catch up,” Ms. Caranci said.
“If you don’t, the benefits of that population increase will erode over time. Someone has to do the math here that we have a system that can accommodate everybody.”
Source: TD report predicts higher interest rates and an affordability crisis
Lastly, Diane Francis in the Financial Post:
Prime Minister Justin Trudeau’s push to increase immigration to unprecedented levels is damaging Canada’s health-care system.
The numbers reveal the problem. Last year, Canada welcomed 492,984 new immigrants, all of whom will eventually be issued health cards, entitling them to medical benefits for life. This year, another 465,000 immigrants are set to arrive, plus another 485,000 in 2024 and 500,000 in 2025.
Between 2016 and 2021, the Trudeau government admitted a record of over 1.3 million permanent immigrants into the country, all of whom will require medical services. This has put a significant strain on large urban areas such as Toronto, Vancouver and Montreal, which have borne the burden of the influx because they are where the lion’s share of immigrants settle. Toronto and Vancouver, in particular, already suffer from health-care shortages and unaffordable housing prices.
The feds set immigration targets with little regard for skills, the burden placed on social welfare systems or the impact on housing costs. The result is that many hospitals are reaching their limits. Doctors and nurses are in short supply, Canadians face long wait times for specialists and elective surgeries and millions lack a family physician.
Since I began pointing out the connection between deteriorating health care and high immigration levels last year, little has changed. Recently, Immigration Minister Sean Fraser responded with an embarrassingly inadequate policy fix, announcing that Ottawa would fast-track immigration approvals for 2,000 health-care professionals.
This is not nearly enough. Financial Accountability Office of Ontario projects that Ontario alone will be short 33,000 nurses and personal support workers by 2028, despite provincial initiatives to boost graduates.
Canada’s immigration levels are disproportionate to other developed nations, taking in about four times as many immigrants as the United States on a per capita basis. To make matters worse, Ottawa’s screening is inept. Despite the staggering immigration numbers, the federal government has failed to address the shortage of skilled labour across the country by recruiting qualified tradespeople.
This push to significantly increase the population was concocted at a weekend gathering in 2011 in Muskoka, Ont., led by Dominic Barton, who served as global managing director of McKinsey and Co. before becoming Canada’s ambassador to China for a time, and former BlackRock Inc. honcho Mark Wiseman. They created a Toronto-based lobbying group called the Century Initiative, which believes Canada’s population should reach 100 million by 2100.
The group estimates that, given sagging birth rates, reaching their arbitrary goal of 100 million would require Canada to accept at least 500,000 immigrants a year, if not more. This has now become our official immigration policy, with the Trudeau Liberals targeting around half a million new immigrants per year.
The Century Initiative hopes to create “mega-regions,” increasing the population of the Greater Toronto Area from 8.8 million in 2016 to 33.5 million by the end of the century, the population of Metro Vancouver from 3.3 million to 11.9 million and the National Capital Region from 1.4 million to 4.8 million.
Seven years of this foolish Liberal immigration policy has placed a significant strain on the health-care system and housing market. And Canada is going to make matters worse by admitting upwards of 753,000 international students this year, which will further increase the cost of rentals.
A CIBC report last year said that the admission of huge numbers of newcomers in 2022, including an estimated 955,000 “non-permanent residents,” represents “an unprecedented swing in housing demand in a single year that is currently not fully reflected in official figures.”
This unbridled immigration is placing a burden on Canada’s struggling health-care system and housing market. It is irresponsible.
Multicultural Meanderings 