He hopes a record wave of new Canadians expected over the next three years will help. Demand for the plant’s product — which is installed in Ontario homes — is growing, but Askett says the assembly floor crew is typically limited by about 10 per cent. “It’s definitely been a hurdle. That’s for sure. The pandemic has changed everything for us,” said Askett, vice president of manufacturing for Brockport Home Systems. This construction business is one of many sectors struggling to find workers, with an estimated one million jobs remaining vacant across the country. To help, Canada just announced record immigration goals — 1.5 million new Canadians over the next three years — with plans to bring in 500,000 people by 2025. Federal officials say that will help boost the economy, but the goals also have raise concern about where all these new citizens will make their homes, given the country’s ongoing housing crisis. New Canadians-to-be listen during a citizenship oath ceremony on Canada Day 2019 at the Calgary Airport. Federal officials say the plan to increase the number of immigrants Canada accepts will help boost the economy. (Stephen Lubig/CBC)
Newcomers need more than just housing
Askett says he is encouraged by the new targets as his company often hires and trains young Canadians. “For us it’s definitely positive news,” he said. “Yes, we look forward to any newcomers because we can train, we can train and promote people and hopefully we can offer them gainful employment.” Vancouver property tax expert Paul Sullivan of Ryan ULC, a global business and property tax advisory firm, says Canada needs a better plan to both stimulate a failing economy and ensure there is enough housing and services for incoming Canadians. “We’re building about 265,000 homes a year. And here we’re talking about 500,000 immigrants coming in a year. We’re underfunded before we even talk about that influx of immigrants,” Sullivan said. “It’s not just homes, it’s daycare, it’s transit, it’s hospitals. What’s the plan, guys? You can’t keep throwing people into it.” A construction worker stands in an elevator at a new housing development in Ottawa in October. An influx of new citizens is more likely to affect rents than home prices, according to data experts. (Sean Kilpatrick/The Canadian Press)
New immigrants will not affect house prices: expert
While some worry that a record influx of new citizens will send home prices even higher — data experts say the fear is unfounded. Murtaza Haider, director of the Urban Analytics Institute at Metropolitan University of Toronto, studies data on immigration and real estate in Canada. Most new immigrants … wouldn’t have the cash or enough savings to go out and start buying houses. I don’t expect them to put pressure on housing prices as much, but more on rental demand.- Murtaza Haider, Urban Analytics Institute at Metropolitan University of Toronto Hyder says previous studies show that the federal plan to increase immigration by about 150,000 to 200,000 additional people a year (living in households of three or four people) will have little impact. “My guess is that most new immigrants … won’t have the cash or enough savings to go out and start buying houses,” he said. “I don’t expect them to put pressure on house prices as much, but more on rental demand.” Hyder said it takes about two or three years for new immigrants to become active in the property cycle. “So if we bring in half a million immigrants in 2023 and another half million in 2024, I would assume that would put pressure on home ownership or home ownership in the year to 2026, 2027.” He said previous studies — and the experience during the lockdown when housing markets overheated during the pandemic, when immigration was frozen — show that immigration is not what drives up housing costs. “By December 2020 we had an unprecedented increase in house prices in Canada at a time when there was almost zero immigration because the airports were closed.” Workers whistle part of a low-rise unit installed by Brockport Home Systems in Ontario. Labor data projections show that the Canadian construction industry will need to hire 171,850 workers by 2027. (Brockport Home Systems/HomeTech)
The housing shortage goes back decades
Hyder believes the real cause of the housing shortage is a systemic failure to ensure enough stock was built, a problem he says goes back decades. “Governments have woken up to the realization that we haven’t built enough housing at the bottom,” he said. BuildForce Canada, an organization that studies labor force data for the construction industry, predicts that the Canadian construction industry will need more than 1.2 million workers and will need to hire 171,850 workers by 2027. They expect a drop of 29,000 workers just the baby boomers retire. Between 2016 and 2021, immigrants accounted for four-fifths of Canada’s labor force growth. More than half of recent immigrants — 748,120 of the 1.3 million people admitted to Canada between 2016 and 2021 — entered the country in the economic category. “Immigration is the main driver of population growth in Canada. Now, in order for us and our economy and businesses to grow, we need more workers,” Hyder said. Ricardo Tranjan, a political economist and senior researcher at the Canadian Center for Policy Alternatives, says heavy immigration is vital for more than the construction industry. Newcomers infuse the economy with life, he says, and Canada has always relied on immigration to meet labor needs. “The labor shortage we’re seeing at the moment – which is one of the factors influencing the rise in inflation – is partly due to the fact that in the last two years we haven’t welcomed enough immigrants into the country. The fact that we will aim high and try to attract more is good news.” Census data released last month revealed that immigrants and permanent residents now make up 23 percent of Canada’s population — an all-time high. According to Statistics Canada, immigrants who arrived between 2016 and 2021 are on average younger than the rest of the population and have been critical to filling jobs. A citizenship judge speaks to young Canadians during a mock citizenship ceremony on Canada Day 2020. Census data released last month revealed that immigrants and permanent residents now make up 23 percent of the population — the highest of any seasons. (Justin Tang/The Canadian Press)
The initial pressure will be on the rental market
Economists say any pressure on housing purchases from incoming Canadians appears first in rental markets, and Tranjan said tighter vacancy and rent controls could help moderate rising rents. “Canada has very lax legislation on rent increases in many provinces,” he said. “Rents can go up by any amount from one year to the next. Almost no province has rent control on vacant units, and all of that really drives up prices.” Tsur Somerville, a professor at the Sauder School of Business Strategy, says that historically, newcomers settle in cities like Toronto, Montreal and Vancouver, where housing markets are already tight, so concern about what increased immigration means for accommodation is not out of place. “If you bring in a lot of people who are competing in the market, people who are at the bottom, the poorest people are going to be the ones who are really going to be hurt,” he said. Although some municipalities have already streamlined building permits or are now allowing street houses to increase in density, more rental units are needed, according to experts and developers. But builders say they can’t help ease the housing crisis without workers. Tad Putyra, president of Great Gulf Low Rise, the parent company of chronically understaffed Etobicoke prefab plant Brockport Home Systems, says the prefab walls and floors they make help offset a shortage of skilled workers on construction sites because the product it can be built regardless of the weather, but not without workers. That’s why he applauds Canada’s record immigration targets, saying it’s good for business. “You know it’s a chicken-and-egg situation,” he said. “We need people to build the houses that will eventually be occupied, you know, by the people who build them and vice versa.” Construction workers build new homes at a development in Ottawa. Industry officials have largely applauded the federal government’s new immigration targets, saying they are good for business. (Sean Kilpatrick/The Canadian Press)
