There is an ongoing housing crisis in Canada, and it has reached historic levels. The population growth of over 500,000 since reaching the milestone of 40 million in June 2023 has created a demand for 3.5 million more housing units in Canada. With the average price of a home at $657,145 as of December 2023, the challenges of maintaining housing affordability in densely populated cities like Toronto and Vancouver are made clear.
The construction sector is one of the top 20 industries in Canada and plays a crucial role in addressing the housing shortage. However, according to a recent report by Desjardins Economic Studies, non-permanent residents and immigrants make up less than 22% of Canada’s construction workforce. This percentage has seen minimal growth since 2019, indicating that newcomers are not pursuing construction jobs at the level needed to address the housing crisis.
In addition to immigration, other factors such as the high cost of building materials, supply chain disruptions, and low productivity in the sector are contributing to the housing shortage. The Canada Mortgage and Housing Corporation (CMHC) estimates that these high costs will lead to a reduction in the number of future housing projects, further exacerbating the crisis.
To address these challenges, the report recommends that Canada be more strategic in welcoming newcomers to the construction sector and implement measures to increase productivity. It also highlights the need for immigration policies that prioritize immigrants with strong long-term economic prospects, particularly in areas outside highly-educated fields.
In response to these recommendations, Immigration, Refugees, and Citizenship Canada (IRCC) introduced category-based selection draws for Express Entry candidates with in-demand human capital attributes or occupations. However, more can be done to ensure that skilled newcomers are effectively welcomed to the construction sector and that immigration policies better support the housing market.
The Desjardins report sheds light on the critical role of immigrants in addressing Canada’s housing shortage and reveals the need for a more strategic approach to immigration. As Canada continues to welcome newcomers to help fill labour shortages and address the housing crisis, there is an opportunity to create policies that are more effective in supporting both the construction sector and the overall housing market.
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