For years, Canada’s political class avoided making the obvious connection between immigration and housing affordability. Now, in 2024, even the most ardent defenders of high immigration levels are conceding that our housing crisis is, at least in part, fueled by unsustainable population growth.
This realization is a good first step, but mere acknowledgment won’t bring relief to struggling renters or young families trying to buy their first home. The numbers are undeniable: Canada’s immigration system is out of sync with our housing capacity, and without major reform, affordability will continue to erode.
A recent report from the Aristotle Foundation lays out the harsh reality. In 2000, non-citizens—including international students, foreign workers, permanent residents, and asylum seekers—made up just 2.1% of Canada’s population. That number rose modestly to 3.5% by 2015. But between 2015 and 2023, the proportion surged to 9.1%. In just eight years, Canada’s intake of newcomers increased dramatically, putting unprecedented pressure on housing demand.
Consider this: in 2000, the number of immigrants coming into the country only exceeded new housing construction once. Fast forward to today, and the gap is staggering. In 2023, for every single new housing unit that began construction, five immigrants arrived in Canada. Five. That’s a supply-demand imbalance that no amount of policy tinkering can fix overnight.
The consequences have been devastating, particularly for renters, who bear the brunt of the crisis. While long-term residents tend to own their homes—only 20% are renters—new immigrants overwhelmingly rent when they first arrive, with 60% renting for at least five to ten years before they can afford to buy. That means each wave of high immigration intensifies demand for rental housing, driving up costs for everyone.
And who gets hit the hardest? Seniors on fixed incomes. Young people just starting their careers. Families already struggling to make ends meet. A full 22% of tenant-occupied buildings in Canada house seniors, many of whom simply cannot keep up with skyrocketing rents. An Angus Reid poll found that 34% of young Canadians are now considering leaving the country just to find affordable housing elsewhere.
Yet, while demand for housing has never been higher, supply is not keeping up. Housing starts have declined from 271,198 in 2021 to just 240,267 in 2023. And the type of housing being built has changed as well. In 2000, 61.8% of new homes were single-family dwellings. By 2022, that number had plummeted to just 31.7%. Instead, we’re building more apartments—often with fewer bedrooms—limiting the options for families looking for suitable housing.
The solution is clear: Canada must significantly scale back its immigration levels to better align with housing capacity. The Aristotle Foundation’s report argues that immigration is currently “too much of a good thing” and calls for major reductions across multiple categories. Canadians overwhelmingly agree. When the federal government announced a 21% cut in permanent resident admissions for 2024, a Nanos poll found that 78% of Canadians supported the move. Even after the cuts, 58% of Canadians still feel that immigration levels remain too high.
Early signs suggest that Ottawa’s modest restrictions—capping foreign workers and international students while lowering permanent resident admissions—may already be having an impact. According to the latest National Rent Rankings by Rentals.ca, rents have declined year-over-year for five consecutive months as of February, dropping 4.8%. An RBC report from November predicted this trend, arguing that lower immigration would ease rental demand.
However, while these rent declines are encouraging, they barely scratch the surface of the broader affordability crisis. The average rent in Canada remains a staggering $2,088 per month—still out of reach for many Canadians, including seniors, students, young families, and newly settled immigrants.
The steps taken so far should not be seen as a solution but as a starting point. Immigration reform must go further. If we are serious about restoring affordability, Canada’s immigration policy must be tied to our ability to build homes. That means reducing annual immigration targets to sustainable levels, ensuring that every new arrival has a fair shot at securing housing without driving costs out of reach for those already here.
The political class has finally acknowledged the problem. Now, they need to act decisively to fix it.
