Canada’s housing problems won’t get solved by restricting immigrants

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Closing the door on immigrants can “never be” the solution to solving the Canada’s housing shortage, says immigration minister Sean Fraser, as the country prepares to welcome a record 1.45 million newcomers in the next three years.

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Speaking to immigration experts at an event in Ottawa on Monday, Fraser said Canada will need to bring in more workers who can build homes and encourage people to shift to parts of the country that have a better “absorptive capacity” to tackle the housing sector’s problems, which include a steep rise in prices in the past few years.

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“The solution to our housing shortage is not to close the door to newcomers, it will never be,” Fraser said at the annual Pathways to Prosperity National Conference. “We intend to bring skilled workers in, in larger numbers than was historically the case, who have the ability to work in home building.”

Canada has increased its immigration targets for the next three years, but some economists, such as Carrie Freestone from the Royal Bank of Canada, believe the government needs to embed its targets into its infrastructure plans to make sure the necessities are in place to “welcome everyone.”

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The country wants to bring in 465,000 permanent residents in 2023, 485,000 in 2024 and 500,000 in 2025 as it looks to tackle labour shortages. The numbers are higher than last year’s plan, which targeted 447,055 newcomers in 2023 and 451,000 in 2024.

Canada will also introduce new tools next year to better help the immigration system target sectors such as health care and construction that have the highest need for labour.

Construction continues to be among those industries reporting employment gains, yet there are still increases in the number of job vacancies, according to BuildForce Canada, a national organization representing all sectors of the construction industry.

The Ontario government last month said the province will need about 100,000 more construction workers this decade to meet its goal of building 1.5 million homes by 2031.

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Fraser said the government is about to embark on a “long-term planning exercise” to tackle future problems related to housing, adding he has “all the faith in the world” that the country will be able to avoid creating a “long-term systemic problem when it comes to the conversation about welcoming large numbers of newcomers.”

The minister added he was in constant touch regarding the issue with housing minister Ahmed Hussen, who sits next to him at the House of Commons.

“Our running joke as I sit down and say, ‘Ahmed, if I can continue to increase our immigration numbers, can you build enough houses?’ He says, ‘Well, depends, can you bring enough newcomers with the skills to build houses to make sure we all have … places to live?’” Fraser said. “Though we kind of joke about it, that’s part of the solution.”

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Rebekah Young, head of inclusion and resilience economics at the Bank of Nova Scotia, said the minister’s message was broadly positive since labour shortages are “clearly one of the bottlenecks impeding greater supply.”

But she added the ministers should “be sure to let their provincial and municipal counterparts in on the joke” to ensure the federal policies align across all government levels since many of the “policy levers” for unlocking more homes are at the provincial and municipal levels.

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Immigration plays a key role in Canada’s labour supply, accounting for 84 per cent of the growth in the total labour force during the 2010s, according to Statistics Canada.

At the same time, data shows the skills of newcomers are regularly underutilized. The number of university-educated immigrants working in jobs requiring a university degree fell to 38 per cent in 2016, from 46 per cent in 2001, compared to 60 per cent for Canadian-born workers, according to Statistics Canada.

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