Government was warned two years ago high immigration could affect housing costs

Federal public servants warned the government two years ago that large increases to immigration could affect housing affordability and services, internal documents show.

Documents obtained by The Canadian Press through an access-to-information request show Immigration, Refugees and Citizenship Canada analyzed the potential effects immigration would have on the economy, housing and services, as it prepared its immigration targets for 2023 to 2025.

The deputy minister, among others, was warned in 2022 that housing construction had not kept up with the pace of population growth.

"In Canada, population growth has exceeded the growth in available housing units," one slide deck reads.

“As the federal authority charged with managing immigration, IRCC policy-makers must understand the misalignment between population growth and housing supply, and how permanent and temporary immigration shapes population growth."

Immigration accounts for nearly all population growth in Canada, given the country's aging demographics.

The federal government ultimately decided to increase the number of permanent residents Canada welcomes each year to 500,000 in 2025, a decision that drew considerable attention and scrutiny. It means in 2025, Canada will welcome nearly twice as many permanent residents as it did in 2015.

The document reveals federal public servants were well aware of the pressures high population growth would have on housing and services.

"Rapid increases put pressure on health care and affordable housing," public servants warned. "Settlement and resettlement service providers are expressing short-term strain due to labour market conditions, increased levels and the Afghanistan and Ukraine initiatives."

Housing affordability has now become a political liability for the Liberal government. The Conservatives have gained considerable momentum over the last year as the party pounces on affordability issues, while avoiding the issue of immigration in particular. These pressures have forced the Liberal government to refocus its efforts on housing policy and begin to address the spike in international students with new rules.

Recent data shows Canada’s pace of population growth continues to set records as the country brings in a historic number of temporary residents as well, largely through international student and temporary foreign worker programs.

The country’s population grew by more than 430,000 during the third quarter of 2023, marking the fastest pace of population growth in any quarter since 1957.

Experts spanning from Bay Street to academic institutions have warned that Canada's strong population growth is eroding housing affordability, as demand outpaces supply.