Here’s How Much Immigration Contributed To Canada’s Housing Crisis

Canada’s housing crisis has become one of the country’s most pressing challenges, and immigration’s role in this crisis is the subject of considerable debate. Recent analyses highlight both the direct and indirect ways in which sustained high levels of immigration are contributing factors to the shortage of affordable housing and rising costs.

Population Growth Outpaces Housing Supply

Canada continues to welcome a substantial number of newcomers every year through its immigration programs. In 2025, the federal government expects to admit 395,000 new permanent residents. These targets remain high, with only minor reductions projected over the next few years. In addition to permanent residents, a substantial number of temporary residents—such as international students, temporary foreign workers, and asylum seekers—also arrive annually.

However, government housing policies have not kept up with this sustained increase in demand, contributing to widespread housing insecurity. The national housing strategy aims to create 160,000 new units by 2028, a figure that is significantly below the level required to keep pace with population growth.

According to housing forecasts, supply may fall short by as many as 3.5 million homes by 2030 if current trends continue. This mismatch between population growth and housing supply has created a perfect storm, exacerbating the affordability crisis for both renters and homebuyers.

Pressure on the Rental Market and Affordability

The influx of newcomers, particularly those who initially rely on the rental market, exerts immediate pressure on the availability and affordability of rental housing. This, in turn, drives up rental and home prices for all residents, including existing Canadians.

Recent policy measures, such as imposing caps on international student permits and tightening temporary worker regulations, have been introduced to slow inflows. However, these groups had previously not been considered in official housing demand projections, amplifying the mismatch between supply and demand.

Mismatch Between Policy Areas

There is a mismatch between immigration targets and housing policy, as immigration is generally used as a tool to drive economic growth, but corresponding investment in housing infrastructure has lagged. The current housing plan is insufficient relative to the level of new arrivals, creating affordability challenges, rental insecurity, and inadequate living conditions for many, both newcomers and long-term residents alike.

Skilled Immigrants Are Part of the Solution

While high immigration rates contribute to housing demand, immigration is also seen as key to solving the housing crisis. About 60% of new arrivals come as economic migrants, including many skilled workers who are essential to addressing Canada’s acute construction labor shortage.

Without the help of skilled immigrants in the construction sector, experts warn that it will be impossible to meet ambitious targets for new home construction. The federal government has recognized this by creating special entry pathways for tradespeople, aiming to increase the workforce needed for building.

Calls for Policy Alignment

Many analysts and policymakers stress that better alignment between immigration targets and housing policies is urgently needed. Without this, the housing crisis will likely worsen, with greater numbers facing housing insecurity and affordability challenges.

In summary, high levels of immigration have significantly increased demand for housing in Canada, making the crisis worse due to inadequate housing supply and poor policy coordination. However, immigrants—especially skilled tradespeople—are also considered vital to any lasting solution to the shortage.

The key issue remains the need for coordinated policy action to balance population growth with accelerated housing supply and affordability initiatives.

Regional Impact of Immigration on Housing

The influx of immigrants, particularly in major cities like Toronto and Vancouver, has exacerbated the housing crisis. These cities, already facing severe shortages, are experiencing increased demand due to the concentration of new residents. For instance, Toronto saw a significant rise in rental prices, attributed in part to the influx of international students and workers, highlighting the strain on urban housing markets.

Economic Implications of Housing Shortages

The economic impact of the housing crisis is multifaceted. High rental costs and limited availability force many to seek housing farther from city centers, increasing commuting times and transportation costs. This not only affects quality of life but also productivity, as longer commutes can lead to worker fatigue and decreased job performance.

Success Stories in Integrating Skilled Workers

Despite the challenges, there are notable successes in integrating skilled immigrants into the construction sector. Programs like the Skilled Trades stream have effectively brought in qualified workers, contributing to increased housing production. For example, in Ontario, such initiatives have led to the completion of several affordable housing projects, demonstrating the positive impact of targeted immigration policies.

Proposed Solutions for Policy Alignment

Policymakers are considering several strategies to align immigration with housing needs. These include increasing national housing targets, implementing stricter rent control policies, and fostering partnerships between public and private sectors to accelerate construction. Additionally, there is a push for more accurate projections of housing demand, incorporating data on both permanent and temporary residents.

Expert Opinions and Future Outlook

Experts emphasize the need for a coordinated approach, suggesting that without significant policy changes, the housing crisis may worsen. They advocate for comprehensive planning that considers both population growth and housing supply, ensuring that immigration levels are balanced with adequate infrastructure development.