The Liberals’ about-face on immigration will help ease the housing crisis plaguing the country, but will be insufficient to resolve the shortage in the coming years, according to a report tabled in federal Parliament on Friday.
A major about-face
Recognizing the impact of immigration on the housing crisis and social services, the Trudeau government significantly reduced its temporary and permanent immigration targets last month.
After years of record population growth, Canada projects slight reductions of 0.2% in population in 2025 and 2026, before recovering with growth of 0.8% in 2027.
Despite everything, the drop will not be enough to absorb the housing shortfall by 2030, according to the Parliamentary Budget Officer (DPB), Yves Giroux.
Before the announcement of the new targets, Mr. Giroux estimated the gap between the population and the number of housing units at 1.2 million.
The new targets reduce this gap by almost half, but the shortfall should be around 658,000 units.
A few weeks ago, Ottawa increased the thresholds for permanent immigrants from 500,000 to 395,000 permanent immigrants for 2025 and up to 365,000 for 2027, while Ottawa was forecasting 500,000 from next year and for the years to come.
Added to this is a significant drop in the number of temporary residents: their number is so reduced that the departure of 2.8 million of them is expected in the next three years, or 93% of current temporary residents. on Canadian soil.
Downsides to the plan
Despite these projections, the PBO lists some significant drawbacks.
Assuming that Ottawa succeeds in imposing its thresholds, a total of 2.3 million housing units would need to be built by 2030 to close the supply gap. This represents approximately 390,000 new housing units per year, on average.
This contrasts with the current pace of construction. In 2023, there will be approximately 240,000 housing starts. This was down from the 2021 peak, estimated at 271,000.
Another major drawback: PBO economists judge that “the demographic projections presented in the government’s new immigration plan contain a high level of uncertainty, particularly with regard to the planned departures of non-permanent residents.”
In other words, the huge reduction in the projected number of temporary residents, seen as a central factor in calming the market, may not go as planned.
