A new study from Immigration, Refugees and Citizenship Canada (IRCC) reveals that immigration contributed to 21% of housing price growth in municipalities with populations over 100,000 between 2006 and 2021. While newcomers bring economic benefits and strengthen Canada’s labor force, the research highlights how rising demand has intersected with deep structural issues in the housing sector. With construction activity slowing and regulatory costs rising, both immigrants and Canadian residents are feeling the impact of reduced affordability.
The Link Between Immigration and Housing Prices
According to the study, population growth driven by immigration has been a key factor in housing demand in large Canadian cities. With more people arriving every year, municipalities like Toronto, Vancouver, and Calgary have experienced sharp increases in property prices.
However, immigration alone is not the sole driver. Industry experts point out that government policies, limited housing supply, and rising taxes are just as critical in shaping the affordability crisis.
Construction Sector Under Pressure
- While demand rises, housing construction faces significant setbacks:
- Toronto housing starts dropped 65%, leaving thousands of workers without jobs.
- The Residential Construction Council of Ontario warns of massive layoffs if current trends continue.
- Builders cite regulatory barriers and high taxation, which can account for up to 36% of the cost of a new home.
This means that even as newcomers arrive with the hope of settling, the market struggles to keep up with demand, further pushing prices upward.
Government Policies and Affordability Challenges
The study also points to the role of policy in shaping outcomes:
- Land use regulations slow down new housing approvals.
- Development charges, fees, and taxes significantly inflate construction costs.
- Combined, these factors have contributed to rising prices, leaving both new immigrants and long-term residents facing affordability barriers.
Impact on Newcomers and Local Communities
For immigrants, housing is often the first challenge in building a life in Canada. High rents and home prices in major cities create barriers to integration, especially for families arriving without established financial networks.
At the same time, Canadian residents also struggle with affordability, leading to increased competition for the limited housing stock. Smaller municipalities may absorb some growth, but most newcomers still gravitate to urban centers where job opportunities are concentrated.
What Needs to Change?
Experts suggest that solutions require a balanced approach:
- Accelerating housing construction through faster approvals and reduced red tape.
- Lowering regulatory costs to encourage builders to deliver more affordable units.
- Targeted settlement policies that direct newcomers to regions with available housing and job opportunities.
- Long-term infrastructure planning to ensure sustainable growth across municipalities.
The IRCC study makes it clear: immigration accounted for 21% of housing price growth in major Canadian municipalities, but systemic issues in construction and policy have magnified the affordability crisis. To ensure both newcomers and residents can thrive, Canada must pair immigration with stronger housing strategies, reduced regulatory barriers, and smarter long-term planning. Immigration remains vital to Canada’s future, but solving the housing crunch will require coordinated action across all levels of government.
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