In recent Canadian immigration news, the federal government announced its official plan to address the nationwide labour shortage by bringing in 1.5 million new permanent residents by 2025.
However, the government’s plans to combat the labour deficit may have an unintended consequence – worsening an ongoing housing shortage.
As things stand, the pressure is on to provide enough affordable housing in an overheated rental market to make this imported workforce economically viable.
Canada’s labour shortage
How did Canada’s labour shortage start, and what are its main features and impact on housing?
- An aging workforce is thought to be the main reason for the record-breaking one million job vacancies in the second quarter of 2022.
- Nearly 90,000 of those openings were in the construction industry alone.
- According to Statistics Canada, 49.5% of construction companies expect to have trouble finding qualified workers over the next three months.
- As a result, the seasonally adjusted annual rate of total housing starts across Canada dropped 11% between September and October.
Bill 23, More Homes Built Faster Act 2022
At the same time, a housing shortage has been sweeping the country, and it’s hitting Ontario the hardest. The province has been making efforts to overcome this crisis for the past several months, including by legalising garden suites.
Then, on October 25, the provincial government introduced one of its more controversial solutions: Bill 23, or the More Homes Built Faster Act.
Bill 23 calls for significant changes to the provincial laws governing land use planning, conservation and development charges, with the primary goal of building 1.5 million homes over a ten-year period. To accelerate construction, some pre-established municipal housing regulations would be weakened or removed.
Reactions to the legislation have been mixed. There’s concern from residents about the bill’s loosening of municipal green standards and alleged disregard for climate change as well as the province’s overall affordability.
Newest Canadian immigration news
Many of these new arrivals will likely be Ukrainian refugees. Earlier this year, the federal government introduced the Canada-Ukraine authorization for emergency travel (CUAET) to help support those affected by the Russian invasion of Ukraine. The CUAET facilitates the immigration process by issuing free and extended temporary visas, among other features.
The 500,000 immigrants Canada expects to welcome every year for the next three years may place further strain on the country's already limited housing stock, but increased housing supply will provide counterweight to additional demand as the new residents help build the homes Ontario wants as part of Bill 23.
What about affordability? Dave Wilkes, President and CEO of the Building Industry and Land Development Association, points out the bill’s key strength – facilitating lower rental rates through cheaper development costs and faster approval processes.
In summary, the plan is to increase housing stock, import enough labour to provide the construction capacity needed, and loosen restrictions on housebuilding, which could address affordability if enough new homes are completed.
On balance then, property managers in Ontario will have a larger, more diverse pool of potential tenants and potentially more rental stock to grow their businesses.
And while newcomers may be able to pay rent more reliably every month if they receive consistent government assistance, it will serve property managers well to invest in the tools and processes that will ensure proper tenant vetting and prompt payment.