Canada is facing a severe housing shortage that is contributing to unprecedented increases in housing prices in almost every part of the country.
As a result, prospective homebuyers are tempering their expectations. Some are settling for a less impressive house than they wanted. Others are leaving their communities entirely, moving to a more affordable part of the country – in turn driving up prices and starting the same cycle there.
The consequences of this could be substantial even if the number of Canadians in need of a home stays at its current level – but of course, that won’t be the case.
Statistics Canada estimates that at the start of 2021, Canada’s population numbered just over 38 million people. Its most recent attempt to look forward, in 2018, estimated that under a medium-growth scenario, that number will hit 46.5 million by 2043. In other words, for every four people in the country now, there will be another one – approximately – in 22 years’ time.
Most of these new arrivals will not show up as babies, born into existing households. That natural population growth stopped being the major driver of increases in Canada’s population before the turn of the century.
Immigration powers our population growth now. One study released last year forecasts that Canada could have the world’s highest net migration rate by the year 2100. That brings economic benefits, but also raises the issue of where all those people will live.
While big cities are often thought of as Canada’s immigration magnets, that’s not exactly the case. Yes, there were more than 117,000 newcomers who settled in Toronto in 2019, but that only represents about 1.8 per cent of the city’s population. Newcomers accounted for 2.4 per cent of the population of Charlottetown, P.E.I. that year, and almost as big a share of Regina’s population.
In other words, just as immigrants come from all over the world, they make their homes all across the country.
Between the millions of immigrants expected to move here and the many Canadians who are already relocating in search of affordability, most urban centres in Canada can expect their populations to grow in the coming decades – bringing new pressures to their local housing markets.
BUILDING OUT, OR UP?
In some communities, the solution to a housing shortage is simple: build the city out. Expand its borders. Take over the farms, or the forests, or whatever else may be on the outskirts of town.
That’s been the solution in Manitoba, where the Winnipeg metro area has added 150,000 people to its population since the turn of the century – a 22-per-cent increase.
Jino Distasio, a geography professor and vice-president at the University of Winnipeg, says that while there has been “a spattering of interest” in redeveloping and rebuilding housing in the inner city, government, developer and homebuyer attention has been more focused on Manitoba’s Capital Region – which includes Winnipeg, but also 17 municipalities in the faster-growing suburbs.
“It’s been a little bit of an exodus out of older neighbourhoods, and we’re seeing … a lot more growth in suburban neighbourhoods,” he told CTVNews.ca via telephone this month.
The 18-municipality consortium is working on a plan to guide the area’s growth through 2050; Distasio said he hopes it gives ample weight to other issues that those in the suburbs may see as city problems. Those include infill development, sustainability, and – most importantly, in Distasio’s view – inequality between the higher-income suburbs and the lower-income core.
Those concerns are by no means unique to Winnipeg, they can be found in every big city across Canada. What can’t be duplicated everywhere is Winnipeg’s sprawling growth. Toronto and Vancouver, for example, face geographic and political restrictions that limit their ability to sprawl.
In theory, that necessitates more building upward, but while intensification can work as far as creating more housing goes, it doesn’t do much for those who want to live in a detached house and will pay whatever it takes to do so.
There are plenty of Canadians who fit into that category, as evidenced by CREA data showing that detached homes are gaining in value faster than any other form of housing this year.
There’s another problem, too: competing priorities among different levels of government. A provincial government may want to see that sort of intensification, for example, but municipal governments may be loathe to approve ultra-tall buildings and risk incurring the wrath of those who live nearby.
Nathanael Lauster, a sociology professor and housing expert at the University of British Columbia, saysthat’s the case in parts of the Vancouver region, with municipalities blocking developers’ attempts to increase density.
He suggests that the province might want to follow the lead of New Zealand – as it did before, in making it more onerous for non-residents to own a home – and reform municipal laws to ensure that municipalities cannot place undue restrictions on attempts at intensification.
“Those kinds of municipal reforms could have a major effect, given that municipalities are what are currently blocking that building-up solution in a place like B.C.,” he said via telephone this month.
B.C.’s Agricultural Land Reserve program prevents development in certain zones outside existing built-up areas. With that check on expanding communities outward and some municipalities’ unwillingness to expand upward, Lauster said, the most realistic outcome if that status quo holds is that housing prices continue to increase, pricing more people out of the area.
“We’re already seeing a sort of broader displacement of people who are not able to compete for housing here within the Metro Vancouver Area,” he said.
“I think we want to … invest in actually expanding our gateways, rather than trying to shut some down and saying ‘Well, this is just too pricey for you to move here, you’ll have to go somewhere else.'” he said.
THE OSHAWA EXPERIENCE
Outside Canada’s largest city, meanwhile, the fast-growing communities that make up Durham Region have been that “somewhere else” for Torontonians for decades.
The population of the area around Oshawa, Ont. first boomed thanks to Toronto-deserters in the 1980s. It’s slowed since those days of rapid growth, but it hasn’t stopped; the Oshawa metropolitan area was the fastest-growing in Canada last year. Those 8.5 million people expected to be added to Canada’s population over the next 22 years? In the past 16 years, Oshawa picked up an equivalent share, growing its population from 330,000 to more than 420,000.
John Henry is the elected chair of Durham Region. He says that he expects the area’s population growth to exceed expectations over the coming decade, pointing to the region’s average of 4,000 residential construction building permits issued over the past five years.
So what’s the secret to the region’s success when it comes to population growth? Henry said proximity to Toronto is only part of the answer, touting the region’s green spaces, downtowns, and easy transit access to the larger city as features that attract new residents.
“There’s more to it than just moving out here because of affordability,” he told CTVNews.ca via telephone this month.
That “more to it” also includes the diversified economy that was in place long before Oshawa, Whitby and the rest of Durham Region were seen as bedroom communities. With energy, auto manufacturing, health care and education as major sectors for local employment, Henry said, those who move to the area soon realize that they can find employment without having to commute to Toronto.
“People recognize that Durham is a place where they can come and live that dream and raise their family,” he said.
Asked what advice he would give to the leaders of communities that are preparing to face Oshawa-style population growth in the near future, Henry emphasized the importance of long-term planning – ensuring infrastructure that is built today can support more people in the future, for example, and preparing for the effects of climate change.
NOT RUNNING OUT OF LAND, BUT…
The internet is full of claims that almost all Canadians live within 100 kilometres of the United States border. Sometimes, that figure is said to be as high as 80 or even 90 per cent.
That’s not quite accurate – but it’s not far off, either. Statistics Canada reports that as of 2016, 66 per cent of Canadians lived 100 km or less from the border, leaving 96 per cent of the country’s land mass for one-third of our population.
We’re the second-largest nation in the world, after all, and the World Bank says we have the 10th-lowest population density of any country. We pack four people into every square kilometre of our land – one-ninth the population density of the U.S., and one-70th that of the United Kingdom.
If we need more housing, the thinking may go, surely we have plenty of places to put it?
Again, that’s not entirely true. The Rocky Mountains aren’t going anywhere. Barren tundra is not most people’s idea of an ideal place to start a new community. Cutting into wide swaths of the boreal forest would be politically and environmentally unthinkable. About 12 per cent of our national land mass is covered by national parks and other protected areas.
In regions where the topography isn’t an issue – densely populated southern Ontario, for example – land use can be so heavy that cities are running out of places to continue their outward sprawl.
“What isn’t being used for housing is either being used for nature, like the Greenbelt, or for farmlands – and we’re already losing 175 acres a day in Ontario of farmland to development,” Mike Moffatt, executive director of the Smart Prosperity Institute think tank in Ottawa, told CTVNews.ca via telephone this month.
Just as B.C. has its Agricultural Land Reserve, Ontario has its Greenbelt – and when Doug Ford was running to be premier, the suggestion he’d open it up to development was quickly retracted due to public backlash.
Three years later, though, there are signs that parts of the Greenbelt may be up for grabs. Half of its administrative council resigned last winter in protest of planned environmental reforms, and there are now plans to run a highway through a portion of the belt.
Designations, however, can be removed in ways that mountains cannot. Like many environmentalists in Ontario, Moffatt fears that any government could decide to start developing “little pieces” of the Greenbelt – and that, over time, those pieces could add up to a lot.
What has him particularly worried is that building on the Greenbelt could be seen as a solution to southern Ontario’s housing shortage, especially if it persists for years and years, stoking an ever-increasing amount of anger in those who can no longer afford homes.
“If we don’t solve this over the next 10 years … the political pressure to build homes on the Greenbelt, I think, will just get too high,” he said.
“We’re going to have to figure out a way to get these homes built, because this problem will get solved, one way or another.”