Is the housing crisis pricing out the skilled newcomers Canada wants to attract?

Cross Country Checkup1:51:49Is it fair to increase immigration when housing is scarce?

Ankita Goel was optimistic when she decided to leave her management consulting job in Mumbai in 2019 to follow her husband to Vancouver, where he already had a job in the tech sector.

Four years later, the cost of living in the city has her regretting her choice.

“Housing is unaffordable, groceries are going up, rent is going up as well, and it’s making me seriously consider moving out of Vancouver,” Goel told Cross Country Checkup.

“I feel it’s unfair to new immigrants who leave behind their community, who leave behind jobs in their home country, who leave and everything and come to a new place, and then everything is so difficult for them.”

Goel said she’s definitely not alone and hears similar reservations from other newcomers she knows from India.

Ankita Goel, who moved to Vancouver from Mumbai in 2019, says she can’t recommend Canada to potential newcomers because of the high cost of housing and other essentials. (Submitted by Ankita Goel)

Inflation in Canada is showing no signs of slowing down, and the cost of rent and mortgages continues to rise — leading to an affordable housing crisis across the country.

At the same time, the federal government has increased immigration targets and aims to bring in 500,000 permanent residents per year by 2025. Those figures don’t necessarily include migrant workers and international students, who are all looking for housing.

Christopher Ragan, director of the Max Bell School of Public Policy at McGill University in Montreal, told Cross Country Checkup that he thinks it’s pretty obvious the government sees immigration as key to Canada’s economic growth.

“If you are going to significantly increase the annual inflow of immigrants — and that’s exactly what this government has done — then I think you really have to make sure that you’ve got all of the other pieces in the puzzle working in the same direction,” Ragan said.

Vik Singh, an assistant professor in global management studies at the Ted Rogers School of Management at Toronto Metropolitan University, said it’s possible that highly skilled immigrants researching a move to Canada could start to think twice if the housing crisis doesn’t improve.

“Definitely, because they probably have better choices. They have the ability to go to other countries if they’re really looking into living there,” he said.

Committed to immigration targets: minister

Goel said part of the reason why she’s staying in Canada is that she’s waiting to get her Canadian passport — which will make it easier to apply for an H-1B visa so she can work in the United States.

“I know there’s gun crime and stuff, but it’s much cheaper, and there’s a lot of places you can buy houses there,” she said.

Singh said he understands the logic of this approach: “If you look at the process to go to the U.S., it’s much easier if you have a Canadian passport.”

The COVID-19 pandemic and a surge of inflation driving up the cost of living have created a data lag in tracking the sentiment of newcomer satisfaction with Canadian housing options, he said.

Statistics Canada’s most recent housing survey was conducted between October 2022 and March of this year, but it has not yet been released.

Market research firm Leger surveyed attitudes from new immigrants last year and found 87 per cent recommended Canada but that the high cost of living was the most common reservation.

A politician stands with trees in the background.
‘We have the highest demand we’ve ever seen to come to a country like ours,” Immigration Minister Marc Miller told Cross Country Checkup, adding he doesn’t see Canada walking back its immigration targets. (Justin Tang/The Canadian Press)

“I’ve heard the anecdotal stories about people wanting to leave Canada, but the aggregate numbers we’re seeing at Immigration, Refugees and Citizenship Canada are completely the opposite,” Immigration Minister Marc Miller told Cross Country Checkup.

“We have the highest demand we’ve ever seen to come to a country like ours.”

Miller said he doesn’t see Canada walking back its immigration targets.

Linking immigration and infrastructure

Singh said he thinks more work needs to be done to tie immigration to the current economic realities.

“Perhaps there could be ways of encouraging new immigrants to, you know, go into the skilled trade sector because there are jobs available there. And certainly there are jobs available pretty much everywhere in Canada.”

The Canada Mortgage and Housing Corporation found that Canada needs 3.5 million more housing units, on top of what’s already being built, to restore housing affordability. A report by TD Economics released in the summer found that Canada’s current level of immigration would only widen the housing shortfall over the next two years.

WATCH | How cutting the GST can help fix the housing crisis: 

How cutting the GST can help fix the housing crisis

Jennifer Keesmaat, the former chief planner for the City of Toronto, explains how the federal government’s decision to remove the GST on purpose-built rentals can help alleviate the housing shortage across the country by encouraging developers to build rental units quickly.

“When I hear Minister Marc Miller say there’s kind of no chance that they will slow down the numbers of immigration … I think that’s all right, as long as you’ve got a serious plan to address those other issues. I’m not convinced that that serious plan exists,” Ragan, of McGill University, said.

Miller said there’s work to be done improving Canada’s immigration system, especially when it comes to digitizing the process, but he believes the fault for the housing crisis has little to do with immigration.

“Successive governments, Liberal or Conservative, have underfunded this critical area, and this is something that is not to be blamed on immigrants. The free debt that we’ve seen over the better part of a decade is no longer a present reality,” he said, referring to low interest rates.

Obstacles to finding housing

Syed Hussan, executive director of Migrant Workers Alliance for Change, said he also thinks scapegoating new Canadians for the housing crisis ignores the underlying issues. When immigration slowed during the pandemic, he said, housing prices still climbed.

“I think we need to get the federal and the provincial government back into building housing. What has happened over the last 30-plus years is that it’s been left to private actors, and the private actors have failed,” he told Cross Country Checkup.

A man in a black shirt with a mic in front of him, surrounded by banners and flags.
Syed Hussan, executive director of Migrant Workers Alliance for Change, is shown speaking at a demonstration in support of migrant worker rights in front of the Immigration and Refugee Board of Canada, in Toronto in August 2020. (Christopher Katsarov/The Canadian Press)

Even getting into housing is a challenge for many newcomers.

“We go and show them units, and they’re very shocked at what their dollars will get them here in Winnipeg. So that’s really disheartening,” Codi Guenther, executive director of New Journey Housing, told Cross Country Checkup.

She said newcomers whom she works with to find housing are up against all kinds of obstacles — from a lack of rental history and lease co-signers to the size of the units they need and the fact they often don’t have reference letters from employers.

Even with those difficulties, Guenther said most newcomers persevere and are positive about Canada and the opportunities it could create, especially for their children.

Ankita Goel has been through a lot during her time in Vancouver, including being spit on in public during the pandemic, but said she still thinks the city has much to recommend it if only the cost of living were addressed.

“If it wasn’t so expensive, if it wasn’t for the unaffordable housing, it’s easily a world-class city to live in.”

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