The housing shortage blame game has been playing out in view of the public for over a year but the problem goes back further.
Governments and politicians have been quick to defend themselves and point fingers at their opposition in a ploy to gain support. The federal government is facing the most heat coming from Canadians.
The federal government says developers just need to build more housing and provincial governments blame short term rentals and municipalities and also claim they need money to build government rental housing for the middle class. Some politicians think providing taxpayer funded bailouts are the answer while others believe municipalities need incentives to build more homes.
All of this is kind of true but also misleading at the same time.
On Friday, Robert Kavcic, senior economist at BMO told BNN Bloomberg a major contributor to the house shortage is Canadas unsustainable population growth.
“the story that kind of gets brushed aside too quickly here is what’s happening on immigration and the population growth front” Kavcic said.
Kavcic outlined the issue isn’t just mass immigration but also coupled with younger generations of Canadians that are looking to move out of their parents homes or out of shared accommodations to start their own families.
The Kavcic numbers was referring to were released in a recent alert sent to investors by the Bank of Montreal which outlines that mass immigration is unsustainable and one of the greatest problems to the housing shortages.
The BMO report to investors said ‘There is no version of reality where housing supply can be ramped up enough to meet the tidal wave of demand’ which was shared on X (formerly Twitter) with a chart of housing completions vs population growth going back 30 years to the 1990’s.
A detailed report from BMO reveals the federal government has consistently over shot its annual planned immigration targets since Justin Trudeau became Prime Minister and the trend upwards is about to explode to new heights.
The BMO report also shows Canada needs to triple to quadruple the number of new housing completions to meet the demand needs from previous years of population growth.
While immigration is a federal government issue. How does any fault land on provincial and municipal governments? Local governments failed to question the federal governments mass immigration strategy and failed to account for the local domestic population growth and let it go unchecked.
In 2023 British Columbia experienced an unprecedented net gain of 54,298 non-permanent residents (NPRs), the most significant quarterly influx on record.
“In total, B.C. had a net international migration of 66,190 people during the third quarter of 2023. This figure represents an increase of 26.9% compared to the net gain of 52,170 observed during the same quarter of 2022 and represents the highest total net international migration in a quarter for B.C.” it says in the B.C. Quarterly Population Highlights released on January 30, 2024.
In a line graph generated by BC Rise using statistics compiled from Government of BC and Ycharts from 2019 to 2022. It’s clear population growth has been outpacing completed new housing builds for several years.
Over zealous land protection laws play a major factor in driving up land values.
According to Worldometers Canada is the second largest country in on Earth for land mass but 90% of Canadians live within 100 miles (160 km) of the U.S. border which leaves over 80 per cent of Canadas land uninhabited.
During a BNN Bloomberg interview on Wednesday, February 14, 2024, Mike Moffatt, director of the Smart Prosperity Institute suggests governments need to open more land to be developed to help reduce the cost of housing developments.
While comparing land values and development costs today with when Moffatt purchased his property in London Ontario in 2004. There has been “900% inflation in both land costs and development charges in just 20 years” said Moffatt.
Last year a developers told Burnaby City council in British Columbia that costly fees is one of the main drivers of inflating prices and runs counter to building affordable housing units.
“Every level of government is now charging lots of fees.”
In a recent report released by Rentals.ca, Burnaby has become the second, next to Vancouver, for most expensive city in Canada to rent a place to live.
