Housing crisis: Feds stick by immigration plan, rethink international student flows

2023/08/17 Leave a comment

Possible partial pivot but limited to international students, Minister Miller linking this to fraud concerns, not permanent residents and temporary workers.

Kind of an interesting contradiction in the article between “pace of population growth, facilitated by immigration, is making the housing crisis worse” and “Most experts agree that the root causes of this housing shortage are unrelated to immigration.”

The alarm bells are becoming bull horns: Canada’s housing supply isn’t keeping up with the rapid rate of population growth.

Academics, commercial banks and policy thinkers have all been warning the federal government that the pace of population growth, facilitated by immigration, is making the housing crisis worse.

“The primary cause for (the) housing affordability challenge in Canada is our inability to build more housing that is in line with the increase in population,” said Murtaza Haider, a professor of data science and real estate management at Toronto Metropolitan University.

A TD report released in late July also warned that “continuing with a high-growth immigration strategy could widen the housing shortfall by about a half-million units within just two years.”

But the Liberals are doubling down on their commitment to bring more people into the country, arguing that Canada needs high immigration to support the economy and build the homes it desperately needs.

“Looking at the (immigration) levels that we have recently approved as a cabinet (and) as a government, we can’t afford currently to reduce those numbers,” Immigration Minister Marc Miller said in an interview with The Canadian Press.

That’s because Canada’s aging population risks straining public finances, he said, as health-care needs rise and the tax base shrinks.

A report by Statistics Canada published in April 2022 finds the country’s working population has never been older, with more than one in five people close to retirement.

At the same time, Canada’s fertility rate hit a record low of 1.4 children per woman in 2020.

The TD report, co-authored by the commercial bank’s chief economist Beata Caranci, notes that economists are the ones who have been warning of the economic consequences of Canada’s aging population.

“A ramp-up in skilled-based immigration offered a solution. Government policies have delivered, but now the question is whether the sudden swing in population has gone too far, too fast,” the report said.

The federal government’s latest immigration levels plan, released last fall, would see Canada welcome 500,000 immigrants annually by 2025.

In contrast, the immigration target for 2015 was under 300,000.

Although the half-million figure has caught considerable attention, it’s not just higher immigration targets that are driving the surge in population.

Canada is also experiencing a boom in the number of temporary residents who are coming to the country, which includes international students and temporary foreign workers.

In 2022, Canada’s population grew by more than one million people, a number that included 607,782 non-permanent residents and 437,180 immigrants.

Miller said in the interview that the federal government is open to reconsidering international student enrolments, particularly amid fraud concerns.

Earlier this year, hundreds of people were suspected of being caught in a fraud scheme that saw immigration agents issue fake acceptance letters to get students into Canada.

“There is fraud across the system that we are going to have to clamp down on,” Miller said.

The increased scrutiny of Canada’s immigration policies and population growth comes as the country faces a housing affordability crisis caused in large part by a shortage of homes.

Most experts agree that the root causes of this housing shortage are unrelated to immigration. Red tape and anti-development sentiment at the municipal level, for example, can lead to major delays in projects.

Federal tax incentives that helped spur purpose-built rental constructions were rolled back decades ago, leading to a massive shortage in rentals that has slowly built up over time.

Given these existing challenges, experts are concerned strong population growth will add fuel to the fire.

BMO published an analysis in May that estimated that for every one per cent of population growth, housing prices rise by three per cent.

The rebound of the Canadian real estate market this year also shows how immigration is helping to maintain demand for housing, despite decades-high interest rates.

In contrast, the immigration target for 2015 was under 300,000.

Although the half-million figure has caught considerable attention, it’s not just higher immigration targets that are driving the surge in population.

Canada is also experiencing a boom in the number of temporary residents who are coming to the country, which includes international students and temporary foreign workers.

In 2022, Canada’s population grew by more than one million people, a number that included 607,782 non-permanent residents and 437,180 immigrants.

Miller said in the interview that the federal government is open to reconsidering international student enrolments, particularly amid fraud concerns.

Earlier this year, hundreds of people were suspected of being caught in a fraud scheme that saw immigration agents issue fake acceptance letters to get students into Canada.

“There is fraud across the system that we are going to have to clamp down on,” Miller said.

The increased scrutiny of Canada’s immigration policies and population growth comes as the country faces a housing affordability crisis caused in large part by a shortage of homes.

Most experts agree that the root causes of this housing shortage are unrelated to immigration. Red tape and anti-development sentiment at the municipal level, for example, can lead to major delays in projects.

Federal tax incentives that helped spur purpose-built rental constructions were rolled back decades ago, leading to a massive shortage in rentals that has slowly built up over time.

Given these existing challenges, experts are concerned strong population growth will add fuel to the fire.

BMO published an analysis in May that estimated that for every one per cent of population growth, housing prices rise by three per cent.

The rebound of the Canadian real estate market this year also shows how immigration is helping to maintain demand for housing, despite decades-high interest rates.

Source: Housing crisis: Feds stick by immigration plan, rethink international …

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Analysis: Canada’s immigration creates ‘mirage’ of economic prosperity, TD report predicts higher interest rates and an affordability crisis 

2023/07/27 Leave a comment

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:

Canadian Prime Minister Justin Trudeau has fueled economic growth and plugged gaps in the labor market by ramping up immigration, but now new arrivals are straining public services and contributing to an overheating economy, economists say.

Since taking power in 2015, Trudeau has brought in an estimated 2.5 million new permanent residents, driving the population above 40 million.

Canada’s population grew at its fastest pace since 1957 last year, placing it among top 20 fastest growing countries in the world, Statistics Canada said, in part offsetting the effects of aging residents who are retiring and adding to healthcare costs.

In large part thanks to immigration, Canada has matched the United States with an average GDP growth of just over 2% over the past decade, well above the 1.4% G7 average, according to Marc Ercolao, an economist at TD Securities.

But problems caused by rapid immigration are beginning to show. First of all, the Bank of Canada struggled to pin down the impact of the newcomers as it tried to cool economic growth.

Bank of Canada Governor Tiff Macklem has said immigration adds to both supply and demand, but the overall effect has increased the need for higher interest rates. While immigrants helped ease a labor shortage, they added to consumer spending and housing demand.

“If you start an economy with excess demand (and) you add both demand and supply, you are still in excess demand,” he said about immigration earlier this month after hiking rates to a 22-year high of 5.0%.

The more concrete problems are the growing strains on transit, housing and healthcare, issues that have begun to dog the federal government as municipal and provincial leaders increase calls for more funding to address them.

“If we want to do more immigration, fine, but let’s have a suite of policies” that increase infrastructure investment for “transit, housing, healthcare… schools,” said Chris Ragan, director of the Max Bell School of Public Policy at McGill University in Montreal and an adviser to the Conservative Finance Minister Jim Flaherty in 2009-10.

“Our communities and our economy are made stronger every day by people who chose to move to Canada,” said a spokesperson for the Finance Ministry.

Most “will contribute to Canada’s economic prosperity and… help address the labor shortages”, the spokesperson said.

‘MIRAGE’

Earlier this month, under pressure from Toronto’s new mayor, Trudeau’s government pledged nearly C$100 million ($76 million) to the city to help house refugees who had been sleeping on the street.

One-fifth of Canadians in the publicly funded healthcare system do not have a family doctor, the Angus Reid Institute research firm said last year. In Toronto, Canada’s largest city, an average driver lost 118 hours in traffic in 2022, up 60% on the year and the third-highest in North America, data analytics firm Inrix says.

While immigration adds to annual GDP, per capita GDP has grown only 2.4% since the first quarter of 2016 compared to 11.7% for the United States. That means Canadians’ wealth, or their standard of living, is rising more slowly than in the U.S.

“The Canadian economy on a per-capita basis is flat on its back,” said David Rosenberg, chief economist and strategist at Rosenberg Research. Through population growth “you can create this mirage of economic prosperity, but in the end that’s what it is, a mirage,” he said.

Source: Analysis: Canada’s immigration creates ‘mirage’ of economic …

TD report predicts higher interest rates and an affordability crisis 

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.

Source: Diane Francis: Immigration pushing housing, health care to the breaking point

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Trichur: TD raising the bar for corporate Canada by agreeing to racial-equity audit

2022/04/02 Leave a comment

Look forward to seeing the results as I assume TD will share these at least at the macro level:

It’s often said in the corporate world that “what gets measured gets done.”

That’s why one of Canada’s biggest companies is heeding the call of an institutional investor to become more rigorous about assessing the effectiveness of its diversity and inclusion policies.

Toronto-Dominion Bank TD-N +0.48%increase is believed to be the first chartered bank and one of the first public companies in Canada to agree to an independent racial-equity audit to provide a reality check of its progress on dismantling systemic discrimination across its North American operations.

A racial-equity audit – also known as a racial-justice audit, a racial-equity assessment or a civil-rights report – is an important tool that helps shareholders determine which companies are taking real action on combatting racism. These audits are conducted by third parties and cover a company’s employment, compensation and business practices, including how it sells products and services. Companies are then expected to publicize the findings and use the feedback to fix problems.

Dozens of public companies, including Amazon, AT&T and Goldman Sachs in the United States, have received shareholder proposals calling for racial-equity audits over the past year, according to a search of securities filings conducted on the financial-intelligence platform Sentieo.

Although more investors are advocating for these audits, some companies still oppose this type of accountability. That’s why the commitment made by TD Bank is noteworthy – it is raising the bar for the rest of corporate Canada.

TD made its decision after holding talks with the BC General Employees’ Union (BCGEU). Specifically, TD has agreed to hire a third-party law firm to conduct a racial-equity assessment of its Canadian and U.S. employment policies. It has also agreed to provide updated information about the assessment by June 30, 2023.

The details are still a bit fuzzy, but it’s progress, folks.

Diana Lee, vice-president of diversity and inclusion at TD, said the bank recognizes that “assessment and measurement are vital tools to create meaningful progress” toward racial equity.

“We are committed to use the results of this racial-equity assessment to inform not only our employment policies and practices, but also our future business practices in supporting Black, Indigenous and minority customers and communities,” Ms. Lee added.

Separately, regulators are also putting increased pressure on banks to ensure their business practices don’t create disparate outcomes for racialized people. In the U.S., for instance, the Consumer Financial Protection Bureau plans stricter enforcement of fair-lending laws and a crackdown on digital and algorithmic practices that potentially discriminate against Black customers.

TD, of course, isn’t the only Canadian bank with significant U.S. operations. BCGEU, which has withdrawn its shareholder proposal at TD in light of the bank’s commitment, is putting other lenders and public companies on notice.

“We will continue doing everything in our power as investors to make sure that racial-equity assessments and audits become standard practice for public issuers and institutions in Canada. We will start contacting other chartered banks on this issue after the TD AGM,” BCGEU president Stephanie Smith said.

“The bottom line is, it isn’t enough for Canadian public issuers and institutions to talk the talk of diversity and inclusion by developing and announcing policies; investors deserve to know what impact those policies are having.”

Property and casualty insurer Intact Financial Corp., meanwhile, has agreed to “assess some internal practices” and to “enhance disclosure,” a company spokeswoman said.

Intact received a proposal from the Shareholder Association for Research and Education, a non-profit organization that represents institutional investors, said Kevin Thomas, SHARE’s chief executive.

SHARE, along with its clients, is interested in various employment issues affecting insurers but also whether their underwriting assumptions create unequal impacts for racialized people.

It takes a similar approach with asset managers, advocating for racial equity within companies but also pushing them “to address the potential impacts of investment decisions down the chain with investee companies,” Mr. Thomas said.

SHARE, meanwhile, says it has also filed proposals with companies Mondelez and Constellation Software.

Mondelez has yet to publish its proxy circular so its position on the proposal is not clear. However, Constellation Software has already opposed the idea in its filing, arguing that while it believes in an equitable and inclusive work force, “the Corporation’s interests, as well as the interests of racial diversity, equity and inclusion, are best served by its existing organizational structure and approach.”

Ridiculous. We all know who benefits from the status quo. And – here’s a big hint – it’s never racialized people.

“Every CEO these days will tell you they are committed to diversity and inclusion,” Mr. Thomas said. “For investors, a racial-equity audit is our way of testing whether management is blowing smoke or whether they are delivering on that promise. That tells us a lot about management quality, ethics and their ability to implement on the goals they set – all critical questions for their investors.”

Companies must hold themselves accountable for the public pledges they made to eradicate systemic discrimination after the police murder of George Floyd nearly two years ago prompted a massive public outcry.

That’s why TD deserves kudos for agreeing to a racial-equity audit. By taking this important first step, TD is putting pressure on other public companies to follow suit. Investors will be watching to see which ones step up next.

Source: TD raising the bar for corporate Canada by agreeing to racial-equity audit

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TD Bank takes down ads targeting South Asians after complaint about word ‘desi’

2019/01/23 Leave a comment

The complexities and sensitivities in multicultural marketing:

TD Bank has stopped running online advertisements that use the word “desi” to target the South Asian community after at least one person complained about the ads.

Jatin Patel demanded the bank take the ads down after he saw one of them while scrolling through an Indian news app.

“At first, I couldn’t believe my eyes,” Patel said.

“In India, it is used as an offensive term,” he told CBC Toronto, adding that some Indians use the word to describe people as “not very modern” and “from the countryside.”

“Desi” originates from the Sanskrit word “desh,” which means “nation.” It’s commonly used, mostly by young people, to describe people and culture as truly or typically South Asian. It’s even made its way into the titles of many South Asian films.

TD’s ad, which could be seen on both social media platforms and the web, featured videos and pictures with the tagline: “62 per cent of desi Canadians don’t know how much to save for retirement.”

Patel says he gets that TD is attempting to target a specific community, but he believes the wording was “inappropriate and insensitive.”

He immediately contacted the bank to complain about the ad, and TD responded by taking it down the same night.

Patel says he’s hoping for a personal apology, but he also says the damage has been done.

“If you slap someone, and then you say, ‘Sorry,’ what does it mean? The action has already been completed.”

TD Canada says it pulled the ads to show it respects the community.

“Inclusion and diversity are core values at TD, and we continuously make every effort to ensure we respect our customers and colleagues in everything we do,” the bank said in an email statement to CBC Toronto.

Patel is not the only one who thinks the advertisement may have taken the wrong path.

Tushar Unadkat, chief executive of Mukta Advertising in Toronto, said TD’s ad failed because it doesn’t connect with the entire community.

“If someone calls me desi, I’m OK, but I’m very sure that within Canada and within India, as well, there’s a section of people who would use the term to look down upon a different class of people,” he said.

“You’ve got to understand how the community relates to that term locally.”

But Sharifa Khan, chief executive of Balmoral Multicultural Marketing on Toronto, disagrees.

Sharifa Khan, chief executive of Balmoral Multicultural Marketing, thinks ‘desi’ is an acceptable term. ‘It’s certainly not derogatory,’ she says.

“The language has to be 100 per cent authentic for a marketing campaign to be successful,” she said.

“TD has been around long enough to know how to target a multicultural audience.”

Khan says TD likely did its research before crafting the ads.

“Lots of social marketers will use relevant and key words to appeal to their market,” Khan told CBC Toronto.

“And the word ‘desi,’ people within the community will connect with this word all the time,” she added.

“It’s certainly not derogatory.”

Source: TD Bank takes down ads targeting South Asians after complaint about word ‘desi’ | CBC NewsTD Bank has stopped running online advertisements that use the word “desi” to target the South Asian community after at least one person complained that the word is “offensive.”January 21

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Canada becomes more unequal, but good policies could halt that: TD Bank

2014/11/26 Leave a comment

When the banks start worrying about rising inequality ….

But author [TD Economist] Craig Alexander says rising inequality is bad for the economy – both because it leaves lower income people with less to spend and because it stalls opportunity for children and youth.

“Inequality has risen and it is a concern, because it actually can hamper investment in human skills, it can hamper economic growth. There’s an increasing body of literature that shows that elevated levels of inequality is not just bad for individuals, it’s bad for your economy and your society,” he said in an interview with CBC’s Metro Morning.

He calls for smart policies that improve Canadian productivity and social mobility, among them:

  1. Investing in policies that improve productivity.

  2. Investment in skills training.

  3. Reviewing the tax and income distribution systems.

  4. More means testing on programs to shift support to families more in need.

  5. Improving policies around education, early childhood education and health.

Canada becomes more unequal, but good policies could halt that: TD Bank – Business – CBC News.

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