Canadian Politicians Have Failed Gen-Z and Younger Millennials
Neglect, incompetence, abdication of responsibility? — whatever you want to call it, its bad.
New data from the Bank of Canada has revealed that Canada’s housing crisis is much worse than previous thought.
Specifically, the gap between the number of housing units being built, and number of housing units required, is widening.
Housing Demand at 535,000 Units
The “demographic demand” (IE. the amount of new households forming that would require shelter) has surged from 220,000 units per year, to 535,000 units per year in 2023, according to the Bank of Canada.
Housing Starts at Only 220,000 Units
Housing construction hasn’t kept pace with housing demand. In fact, Canada is building fewer homes than in 2021.
The Cause of Surging Housing Demand? Immigration.
The cause of surging housing demand in Canada can be attributed to surging immigration levels.
In 2023, Canada admitted 1.2 million people into Canada, the highest number ever recorded.
According to Stats Canada’s Latest Population Estimate Only 2.4% of Canada’s Population Growth Comes from Births
Most of Canada’s 3.2% population growth rate stemmed from temporary immigration in 2023. Without temporary immigration, that is, relying solely on permanent immigration and natural increase (births minus deaths), Canada’s population growth would have been almost three times less (+1.2%).
In 2023, the vast majority (97.6%) of Canada’s population growth came from international migration (both permanent and temporary immigration) and the remaining portion (2.4%) came from natural increase.
-Statistics Canada
Politicians cant control the birth rate directly, but they can control the immigration rate.
This housing crisis was entirely preventable, and in this regard, politicians in Canada have completely failed to plan for the future.
- Why didn’t anyone review housing data before setting immigration targets?
- Why wasn’t immigration tied to housing supply?
At the same time, provincial and municipal politicians who control the zoning regulations development fees have been using these tools to strangle the supply-side of the equation. (consider Toronto’s 900 chapter zoning by-law or $100,000+ development fees)
Younger Millennials Will be in Their Mid-40s Before There is Hope of Adequate Supply
The CMHC has estimated that Canada requires 5.8 million new housing units by 2030 in order to restore affordability in Canada.
According to recent analysis by the Northern Account, in order to achieve this target, Canada will be required to build 828,500 homes per year, from now, until 2030.
However, the CMHC projects that Canada will only build 241,000 units per year going forward.
Therefore, Canada is only on-track to complete 27% of the homes required and will likely fall 4.2 million homes short of this target. (see our analysis for complete figures and sources)
The Death of the Single Family Home
Not only will younger Canadians be stuck fighting each other to secure housing over the next decade, the type and quality of housing they will be able to acquire will diminish, as well.
Think of this as the shrinkflation of housing.
Single family home construction is in a free-fall, and it is being replaced with apartment construction. In Ontario, for example, single family home construction is down to levels not seen since 1991; and, starts are down 72% from peak single detached home construction in 2003.
In fact, Ontario only started 551 single family homes in February 2024.
Remember, 1.4 million people are coming to Canada each year, 50% of which go to Ontario. Yet, Ontario is building 6200 single family homes on an annualized basis.
Young Adult Canadians Pay the Price
Apartment living may be fine for some who enjoy the urban lifestyle, but for any younger Canadian aspiring to raise a family, is this really what they want?
Has anyone actually asked them?
