With the aim of reducing the drag on economic growth imposed by our aging population’s stalling of labour force expansion, Canada’s federal government is once again raising its permanent resident admission targets. This will have wide-ranging implications for our communities, begging one question above all others: how will we house them?

On November 1, 2022, the federal government announced its updated permanent resident (PR) targets as part of its Immigration Levels Plan 2023-2025. The new targets will aim for 465,000 PRs in 2023 (up from the previous 2023 target of 447,000), 485,000 in 2024 (up from the previous 2024 target of 451,000) and 500,000 in 2025. 

The primary goal of the rising PR targets is to mitigate the negative economic impacts (via slowing labour force growth) of Canada’s aging population over time. And aged it has—and will: between 2011 and 2021, the share of Canada’s population aged 65-plus rose from 14% to 19%, and is projected to rise further to 23% in ten year’s time, despite increased flows of immigrants (who are a relatively youthful 28 years old, most typically). The country’s labour force, in turn, is projected to expand at an annual rate of less than 1% one decade from now, squeezing our ability to grow the economy. And if we didn’t have immigrants? The national labour force would essentially stop growing within the next decade, and would actually begin to contract by 2034. 

In summary, the new targets add almost 115,000 more people to the Canadian population between 2023-2025 than we were originally planning for. What does this mean for, say, a place like Metro Vancouver? Applying some “back-of-napkin” math can help us here: for starters, knowing that Metro Vancouver accommodates roughly 11% of immigrants to Canada, the 115,000 additional PRs nationally would equate to 12,600 more people living in this region by 2025 than were originally expected. At the region’s current household size of 2.5, this would translate to a need for approximately 5,000 additional homes to house this additional growth—a number essentially equivalent to the upcoming Senakw development in Vancouver’s Kitsilano neighbourhood, the yet-to-be-built Fraser Mills community in Coquitlam, or 20 apartment buildings with 250 homes apiece.

But wait. The latest full-year data (for 2021) show that 70% of PR admissions to Canada were of people that were already here on permits. This is an important qualification of the new PR targets, as it suggests the housing needs associated with the higher targets could be substantially less than originally thought.

Or perhaps not.

Through the first eight months of the year, there have been almost 740,000 new arrivals to Canada in the Temporary Foreign Worker, International Mobility Program, and Study Permit categories. That’s the highest number ever recorded in Canada through August, and puts us on pace for a record year for international migration here in 2022. Additionally, the war in Ukraine has seen the Canadian government authorize temporary resident visas for Ukrainian nationals and their family members, where more than 645,000 applications have been received to-date. Of these, more than 338,000 have been approved and almost 109,000 people have arrived so far. As it turns out, then, the significant number of new PRs expected to “originate” from Canada are, in the end, being accompanied by record numbers of temporary residents from other countries. 

As we’ve discussed previously, there is a lack of acceptable rental housing in Metro Vancouver, challenges around housing suitability, and the region’s stock of purpose-built rental housing is not keeping pace with past population growth. Recent patterns of demographic change in Metro Vancouver have demanded that we build 25,000 homes annually to accommodate our growing population. It is notable, then, that annualized housing completions have failed to attain the 25,000-home threshold over the past two months. As the number of international migrants coming to Canada and Metro Vancouver continues to grow, so will our local population and, in turn, the need for additional housing. As such, figuring out a way to complement growth in our economy (vis-a-vis record international migration levels) with an adequate supply of new housing here in Metro Vancouver will be our big challenge.

Our rennie intelligence team comprises our in-house demographer, senior economist, and market analysts. Together, they empower individuals, organizations, and institutions with data-driven market insight and analysis. Experts in urban land economics, community planning, shifting demographics, and real estate trends, their strategic research supports a comprehensive advisory service offering and forms the basis of frequent reports and public presentations. Their thoughtful and objective approach truly embodies the core values of rennie.