Canada's Minister of Immigration, Refugees and Citizenship Marc Miller speaks during Question Period in the House of Commons on Parliament Hill in Ottawa, on Feb. 26.BLAIR GABLE/Reuters
Immigration Minister Marc Miller can recite chapter and verse on what’s not right in our immigration system. Not all the chapters and not every verse, but still: a Trudeau government minister willing to talk about at least some of what isn’t working, in the machine his squad built, is a wonder to behold.
But talk is cheap, especially in the comms-first Trudeau government. And Mr. Miller has been on the job for seven months. That’s not quite a lifetime in politics, but it’s getting there.
Over those seven months, Mr. Miller has listened, been lobbied and said a number of sensible things about what he might do, eventually. However, he has only taken action, and limited action at that, on one file: the student visa program. Over the course of the Trudeau government, these visas became an alternative low-wage temporary foreign worker program, and a cheap back door to permanent residency.
But as for the massive expansion of the other temporary foreign worker streams, leading to 2.5 million foreign residents in Canada as of last fall according to official figures (and unofficially perhaps a million more), or nearly double the figure of just two years earlier? Lots of talk from Mr. Miller. No action.
The impact is measured in falling GDP per capita, which is hard to see, and upward pressure on housing prices, especially rentals – which is hard to miss.
The severe mismatch between housing supply and demand has long-term and short-term causes. Among the long-term causes is decades of underbuilding. But the main short-term cause is a spike in the Canadian population, driven by the government’s decision to foster a huge jump in the number of temporary residents.
Take a look at the accompanying chart. It shows the relationship between the annual increase in Canada’s adult population and the number of housing starts.
The lines have never marched in perfect lockstep, and even small disconnects in the past contributed to big price swings. After the housing bubble of the 1980s, building dropped in the 1990s, which fed the price increases of the 2000s.
What has happened since, however, is unprecedented and off the charts.
In 2016, Canada’s adult population increased by 334,000. In 2022, the figure was 629,000. Last year, it was more than one million. Over the same period, annual housing starts rose from just shy of 200,000 to 252,000.
That rise in housing starts is in fact impressive. We’ve had three years in a row of more than a quarter million starts – something not seen since the 1970s. But the speed and scale of population increase swamped that. Housing supply is rising; housing demand via population growth is exploding.
The Canada Mortgage and Housing Corporation estimated last year that, at current building rates, Canada would be short about 3.5 million homes by 2030. Canadian Imperial Bank of Commerce economist Benjamin Tal recently found that, taking the population spike into account, we’re on track for a five-million-home shortfall.
In the long run, it is of course possible to build millions more homes. And in the long run, that’s what Canada needs.
But even in a perfect world, it takes years to design, finance, market, build and finish a condo, or an apartment tower, or a housing development. The redevelopment of Toronto’s old Honest Ed’s discount store into shops, offices and more than 900 apartments was announced in 2015. Construction started in 2017. It’s still not finished.
As John Maynard Keynes famously put it, in the long run we’re all dead. What he meant was that, while various forms of economic pain may resolve themselves in some distant future, if you have tools to stop the pain right now, why not use them?
Instead, the Trudeau government seems to be banking on solving the housing crisis, or more precisely its own popularity crisis, through a strategy of altering voter perceptions rather than changing underlying economic reality. Recent months have featured a steady stream of small but sunny housing funding announcements, and photo ops with premiers and mayors. A few hundred million dollars here and a few hundred million there, to build a few hundred homes here and a few hundred there.
The trouble is that the ambition, and the funds, are not remotely at the scale of the problem. Again: Over the next six years, Canada needs to build not five million homes, but five million more homes than would otherwise have been built.
And the housing crisis is here and now. If you lose electricity, you want service restored five minutes ago. An announcement about new generating facilities coming on stream in 2032 is not what you’re looking for.
Ending the severe mismatch between housing demand and supply, in this decade rather than the next (or the one after that), means addressing the cause of the spike in demand. It means significantly downsizing the temporary foreign worker program, downsizing and smartening up the student visa program, and things like reintroducing visa requirements for Mexican tourists, which the Trudeau government removed in 2015, and which has led to tens of thousands of refugee claimants arriving at Canadian airports.
Canada had an immigration consensus from the 1960s to 2015. The Trudeau government broke it. Mr. Miller can restore it. But des belles paroles won’t be enough.