Tag: foreign students

My Rant for Today: Immigration Overload?

January 13, 2024

Driving to have coffee with my friend at Timmies, I listened to the daily talk show with a panel on immigration. One said the Canadian public is sympathetic to (and has an enviable record), welcoming immigrants. Based on that attitude and arguing that the economy needs immigrants for its continued growth, the government doubled immigration targets to the 500,000 range. In addition, another million people arrive in Canada annually as foreign students and temporary workers, many of these becoming permanent residents over time.

The combination of immigration and temporary workers and foreign students have coalesced into a momentous problem in Canada, resulting in an acute shortage of housing and a precipitous decline in healthcare (lack of nurses, doctors, unacceptable emergency department waiting times). Without question, the huge number of recent immigrants, foreign students and temporary workers are a major contributing factor to these problems. 

Up until a few years ago, with half the number of arrivals into Canada compared to the recent year, assimilation into Canadian society had occurred seamlessly without impacting housing and healthcare. Services provided paralleled demand. (In fact, it has just been revealed that the Canadian cabinet minister responsible for immigration was warned two years ago that we were facing a housing crunch, even before immigration levels were increased this past year!  This warning was ignored for political purposes!)

Now, Canadians are becoming aware of what the massively increased number of newcomers has wrought, and anecdotal evidence points to a shrinking welcome mat.

One panelist on the talk show said that we need immigrants for our economy to grow. OK. How many do we need? I’m not too fond of loose talk. Provide some metrics. Arguments with no evidence to back them up are useless. The bottom line is: how many immigrants, foreign students and temporary workers do we need for the economy?

People with skills required in Canada would be a great addition to the economy, but how many immigrants are skilled in occupations we need?  We are told that we need them for house construction; however, we are also told that only about 5% of immigrants work in the housing industry….

I’d like to know how many of the half million immigrants we allow to enter Canada qualify for the needed skilled categories. Equally importantly, how many of these needed people would be allowed to practice their trade in Canada without certification (medical licensing, trade licensing)? And how long would it take to get their licenses to be productive in Canada?

Without data to back up the justifications for even more immigrants, we, the Canadian public, are left with only anecdotal information and our own experiences of worsening health care access, inability to find family doctors, long wait times for emergency care and rapidly increasing housing and rents which all will translate into reversing Canadians’ goodwill towards immigration.

Are We Panicking About Housing?

November 27, 2023

Current headline news bombards us with titles like: “housing shortage”, “unaffordable housing”, and “people die on the streets for lack of housing”. These housing-related issues have materialized since 2015; we did not have these topics at that time.

However, all of these headlines spawn questions. For example, what is affordable housing? One metric the Central Mortgage and Housing Corporation (CMHC, the Canadian mortgage insurance company) uses is that no more than forty percent of after-tax family income should be used for housing. But does this metric apply today?

The median family income in Ottawa is just over $100,000 today, and the average house price is slightly over $600,000. The minimum downpayment is five percent for the first half million dollars, ten percent for the next half million, which translates into $35,000 for the average house in Ottawa. So, with this downpayment one needs a mortgage of $565,000 that would cost today circa $4.000 per month. The annual cost, $48,000, would therefore be over forty percent of the annual income of the average Ottawa family income. Which means housing is, in fact, unaffordable, unless one has a larger downpayment to reduce the monthly mortgage payment.

One way to look at housing issues is to identify factors creating demand for, and supply of, housing. Either decreasing demand, increasing the supply of housing, or doing both, would alleviate the current housing problem.

The major factors on the demand side are immigration and the entry of foreign students. Canada let in 430,000 immigrants and 550,000 foreign students in 2022. All of the housing demand can be attributed to these two classes of newcomers to Canada: there are 424 housing units per 1000 people in Canada, so the close to one million newcomers alone needed 400,000 units in 2022 when Canada builds only 250,000 units per annum (Census and CMHC statistics).

While the last two classes of newcomers are beneficial to Canada, they create a huge stress on the housing markets. They are beneficial in that Canadian fertility rates are below replacement rate, hence the rationale for increased immigration. Similarly, Canada is short of skilled construction workers, and therefore welcomes immigrants with such skills. And foreign students pay two or three times the university fees Canadian students pay and therefore contribute to the universities’ bottom line. But we must balance our priorities and perhaps providing housing is more important today than other objectives.

Most of the supply issues can be attributed to the shortage of skilled workers and the lack of land for development. Land is especially a major issue in some of our large cities. Vancouver is surrounded by water and mountains. Toronto’s expansion is limited on one side by water.

Densification has become the key word today to accommodate the increasing population. Densification requires rezoning by municipalities, that takes years. And vacant land development, where available, also takes years for approval.

Are there any solutions? On the demand side, the federal government could reduce the flow of immigration and the intake of foreign students to alleviate demand and pressure on housing. And municipalities could accelerate the approval process to increase the supply of housing.

The two levels of government, working in tandem, could alleviate the housing problem. However, both initiatives would also create negative consequences; Canada needs skilled people and universities favor foreign students. And an acceleration of municipal approvals may weaken environmental reviews and public engagement – both important review elements in the development process and expected by Canadians.  

The bottom line is that increased coordination between the different levels of government would go a long way to streamline the process of welcoming immigrants and foreign students entering Canada by making sure that housing is available.

The danger I see is that a panicky response today encouraging a hugely accelerated house construction program could result in an oversupply of housing in the next few years during which the federal government may change its priorities and reduce targets for immigration and the entry of foreign students.