Prime Minister Justin Trudeau’s government won’t lower its immigration targets despite growing criticism that drastic population growth worsens existing housing shortages.
In one of his first interviews a week into his new cabinet role, Immigration Minister Marc Miller said the government will have to either keep — or raise — its annual targets for permanent residents of about half a million. That’s because of the diminishing number of working-age people relative to the number of retirees and the risk it poses to public service funding, he said.
“I don’t see a world in which we lower it, the need is too great,” said Miller, who’s expected to announce new targets on Nov. 1. “Whether we revise them upwards or not is something that I have to look at. But certainly I don’t think we’re in any position of wanting to lower them by any stretch of the imagination.”
Globally, advanced economies are confronting similar challenges from decreasing birth rates and aging workforces, and many are competing for skilled workers. But while immigration for some countries is a divisive issue that can polarize voters and even topple a government, Canada has comfortably relied on public support to open its doors more widely for working-age newcomers.
Miller’s comments suggest the government is still counting on that backing to grow its population rapidly to stave off long-term economic decline. Trudeau’s government has consistently raised its target for permanent residents. Last year, foreign students, temporary workers and refugees made up another group that’s even larger, bringing total arrivals to a record one million.
In the short term, however, that massive growth has strained major urban centers and exacerbated housing shortages. In the 12 months to March, 4 to 5 international migrants arrived in Canada for every newly started unit of housing construction. That’s the highest ratio of new Canadians to new homes on record in data going back to 1977.
Many Canadians now criticize the government for not only doing too little to boost supply, but also making it worse by adding too much demand from immigration. But Miller pushed back against that view.
“We have to get away from this notion that immigrants are the major cause of housing pressures and the increase in home prices,” he said. “We tend not to think in longer historical arcs or in generational terms, but if people want dental care, health care and affordable housing that they expect, the best way to do that is to get that skilled labor in this country.”
On Wednesday, National Bank Financial’s Chief Economist Stefane Marion called on the government to revise its immigration policy until housing construction catches up with demand. Marion said the government’s decision to open the “immigration floodgates” led to a “record imbalance” between housing supply and demand, and homebuilders can’t keep up with the influx.
A recent survey by Ottawa-based Abacus Data showed 61 per cent of respondents believed Canada’s immigration target is too high, and 63 per cent of them said the number of immigrants coming to the country was having a negative impact on housing.
“What’s driving this is really rational concerns, not xenophobia,” said David Coletto, Abacus Data’s chief executive officer. “From many people’s perspective, the growth that Canada experienced hasn’t been matched with an increase in infrastructure. It’s putting a strain on public opinion toward immigration more broadly. We’d be foolish to assume that Canada’s immune to the same forces that have affected other countries.”
In another survey published in July, 39 per cent of respondents said they would be more likely to vote for a political party that promised to reduce immigration numbers. That compared with 24 per cent who said they’d be less likely to do so and 30 per cent who said it’d have no impact. This suggests there may be an appetite for campaigning on reducing immigration, according to Coletto.
Last week in an extensive cabinet shuffle, Trudeau shored up his economic bench and laid some groundwork for future elections as his government faces attacks over the rising cost of living. Sean Fraser was moved from immigration to housing and infrastructure. Miller — who as Crown-Indigenous relations minister quieted some the loudest criticisms of Trudeau on reconciliation — took the reins at immigration.
“Politicians look in electoral cycles. But in my role, we have to look in generational cycles,” Miller said. “Canada needs to address that in a smart way, and that means attracting a younger segment of the population to make sure that people can retire with same expectations and benefits that their parents had. That’s the stark reality of it.”
- With assistance from Erik Hertzberg.
Soaring housing costs could spell 'disastrous'
political consequences for Trudeau
Laura Dhillon Kane, Brian Platt and Erik Hertzberg, Bloomberg New
The soaring cost of Canada’s housing has become a major political problem for Prime Minister Justin Trudeau as his chief rival zeros in on generational grievances over affordability.
Trudeau has played defense on the issue this summer, appointing a new housing minister last week and shifting some of the blame to other levels of government on Monday. But with his party already sinking in recent polls, housing has become a serious vulnerability for Trudeau.
“Failure to be seen as doing enough on housing could be politically disastrous for the Liberals,” said David Coletto, chief executive officer of polling firm Abacus Data.
The issue is particularly important for Canadians under 40 years old — a critically important demographic that Trudeau’s party couldn’t have won the last two elections without, Coletto said. His firm’s most recent poll put Pierre Poilievre’s Conservatives 10 points ahead of the Liberals.
The benchmark price for a Canadian home has more than doubled over the past decade, reaching $760,600 (US$572,470) in June. Trudeau’s government, which took power in 2015, has also steadily raised its annual immigration targets, with more than one million people arriving last year, straining an already tight housing supply.
Poilievre has hammered Trudeau on the issue, focusing on the anger of younger generations. Canada’s housing affordability is among the worst in the world, he told reporters Tuesday outside the Parliament building in Ottawa.
“Rent has doubled,” he said. “Mortgage payments, doubled. Needed down payments, doubled. All after eight years of Justin Trudeau.”
To be sure, skyrocketing housing costs have many causes beyond Trudeau’s control. Provinces and cities — responsible for land-use planning, zoning and permitting — bear some of the blame, as do real estate investors, foreign buyers, years of rock-bottom interest rates and other factors.
Still, Canada’s ambitious immigration targets have outpaced home building, aggravating the imbalance between demand and supply. In the 12 months to March, 4 to 5 international migrants arrived in Canada for every newly started unit of housing construction. That’s the highest ratio of new Canadians to new homes on record in data going back to 1977.
Poilievre, however, repeatedly sidestepped reporters’ questions on Tuesday about whether he would reduce immigration targets.
Former Liberal lawmaker Adam Vaughan, who helped craft Trudeau’s $82 billion national housing strategy released in 2017, argued the country is better off today than it would have been without his party’s policies. If it had done nothing, federal spending for social housing this year would have been just $1 billion, he said.
However, more needs to be done, and time would be better spent focusing on solutions across levels of government than laying blame, he said. Trudeau’s comment on Monday that housing isn’t a primary federal responsibility was “problematic,” Vaughan said.
“It is a responsibility of the federal government, if not literally then it is politically, and I would argue that it is morally,” said Vaughan, who now works at public relations firm Navigator.
The federal government has a range of tools it could use to address the housing shortage without swelling its debt, said Mike Moffatt, senior policy and innovation director at the Smart Prosperity Institute.
Those measures include targeting immigration policy toward construction workers, electricians and others who could boost housing supply and slowing down international student visa approvals until provinces require universities to build more housing for them.
If the government is going to act, “they better do so quickly because time’s not on their side, and there’s a chance that one of the opposition parties could really start to own this issue,” Moffatt said.
Marci Surkes, who formerly worked as Trudeau’s policy director, said she suspects the government is working on a housing plan as a central plank of its fall budget update.
“This should be ground that the Liberal Party should be occupying and owning,” said Surkes, who now works as an adviser to the Compass Rose Group. “They should have been making progress that was feeling more tangible at this point. And yet the circumstances being what they are economically, whatever progress has been made to date certainly doesn’t feel like enough.”
New Democratic Party Leader Jagmeet Singh, whose party has agreed to prop up the Liberal minority government in Parliament, said on Tuesday that Trudeau’s “finger-pointing” isn’t going to solve the housing issue, even though all orders of government hold some responsibility.
“We can’t ignore significant levers that the federal government has,” he said. “The levers are so significant that I would say the federal government has incredible powers to actually solve this problem if they choose to do so.”