It’s not racism or xenophobia, it’s just math.
While the Trudeau government boosted immigration to record levels, the country’s housing supply failed to keep up. Hundreds of thousands of new Canadians arrive in the country every year, while the number of new housing units being built is not even as high as it was in the 1970s.
Under these circumstances, it’s easy to figure out what happens next.
According to statistics from the Fraser Institute in Vancouver, Canada’s population has grown by an average of 553,568 people annually over the past five years. Meanwhile, the average number of new residential units (houses, apartments, condos, townhouses, townhouses, etc.) has only grown by 205,762 per year.
This is the largest “housing gap” in our history.
Consider that in the 1970s there were an average of 300,000 new Canadians per year, while the number of new homes being built was only about 240,000. That means immigration rates are 86% higher than 1970s levels, while housing construction is 14% lower.
When demand is so much greater than supply, prices naturally rise. And get up.
This is not entirely due to the Liberals’ expansion of immigration. Most years, there are about 40,000 to 50,000 more births than deaths in Canada. This means that between 7 and 9% of our average annual population growth is of natural origin.
However, a large part of the stress on the real estate markets is due to immigration.
Note that I said “immigration” and not “immigrants.” I don’t blame immigrants for Canada’s housing crisis. The federal government controls immigration levels.
If the federal government offers you the chance to move here, take it. It’s Ottawa’s fault for admitting newcomers much faster than it builds housing for them.
Ridiculously, Prime Minister Justin Trudeau insisted back in August that immigration was the “solution” and not the problem. He claimed Canada needed “more carpenters, more skilled workers, more people…to build the homes we need to keep up with the growing economy across the country.”
First, Canada’s economy is among the slowest growing in the developed world. And thanks to the Liberals’ anti-business, high tax and interest rate policies, this is likely to stay that way for more than a decade. Therefore, it is dubious to claim that the housing crisis is due to a fast-growing economy when it is clearly due to fast-growing immigration into a slow-growing economy.
But let’s play the Prime Minister’s game for a minute. If we need more skilled tradespeople to address our housing shortage, what percentage of our new arrivals meet those needs? The most recent statistics show that only about 12% of immigrants own anything close to a home building business.
Even if we need more immigrants to build the additional 1.5 million new homes needed to solve our crisis, the Liberals are neither recruiting nor admitting the right immigrants.
There are, of course, other reasons why housing has become so unaffordable under the Trudeau government. For example, in 2016, the Liberals increased the amount homebuyers had to put aside for a down payment to 20%. And the Liberals’ high-interest rate policies make it necessary for buyers to demonstrate significantly higher incomes to qualify for mortgages, even for homes priced at levels they could have qualified for two or three years ago.
Even under the Liberals’ economic policy tinkering, Canadians’ labor income has increased only slowly, if at all. Americans’ incomes have skyrocketed over the same period, and housing starts have also outpaced ours. That means American homebuyers’ incomes have nearly kept pace with home prices there.
The simple truth is that liberals are naive, incompetent economic managers. They appear to have very little understanding of how the economy works and how their decisions, such as speeding up immigration and increasing the national debt, affect the cost of living for ordinary Canadians.