‘Unprecedented Swing in Housing Demand’: 995,000 Arrivals to Canada Straining Housing Supply, Report Says

A person walks by a row of houses in Toronto on July 12, 2022. (Cole Burston/The Canadian Press)

Nearly 1 million newcomers who arrived in Canada last year are creating an “unprecedented” surge in housing demand that is “not fully reflected” in official records, a report by the CIBC says.

Titled “Housing Demand from Newcomers Even Stronger Than Perceived,” the report said the total number of arrivals by permanent residents (PRs) and non-permanent residents (NPRs) from outside Canada in 2022 is estimated to be 955,000.

This represents an “unprecedented swing in housing demand in a single year that is currently not fully reflected in official figures,” it said.

The report, released Jan. 25, stressed that new PRs who were already in Canada, as in those who received their status in the past year, “do not create incremental housing demand.”

“This spiked during COVID, with 70 percent of permanent residents ‘landing’ from within Canada in 2021, before falling dramatically to about 42 percent,” it said.

Economist Benjamin Tal, author of the report, argued that the impact created by NPRs is “even larger.”

“While the focus is mostly on new immigrants, the reality is that NPRs represent a larger share of new arrivals,” he said.

“This segment is also the most volatile and a significant source of variation in population forecasts in Canada. Statistics Canada’s population forecast has underestimated NPRs over many years and by no less than 100,000 in 2022.”

Using in-house data as well as data from Immigration, Refugees and Citizenship Canada (IRCC), Tal estimated that NPR arrivals in Canada increased from 258,000 in 2021 to no less than 700,000 in 2022—a 170 percent increase.

‘Misleading’

Among the NPRs are 140,094 Ukrainians who arrived under the Canada-Ukraine Authorization for Emergency Travel (CUAET) program launched last March by the federal government.

“That program is the Canadian immigration policy response to the war in Ukraine and has resulted in a notable shock to arrival patterns,” Tal said. “But students and temporary workers from abroad also materially increased.”

The Liberal government had said it aims to bring in 465,000 new immigrants in 2023. Tal said that doesn’t mean net population growth due to immigration, and thus demand for housing, will rise by the same number.

“To assess the impact on Canadian communities and housing, headline official Immigration Canada numbers are misleading,” he wrote. “Rather, we need to measure international arrivals, i.e visa issuances and arrivals for those visa recipients not already in Canada.”

The report referred to IRCC’s figures, which stated that the net increase in the number of new immigrants in 2022 was 31,000, or 7.6 percent.

“However, due to the decline in the share of those that landed from within Canada in 2022 (that is, a higher share of international arrivals), the actual net increase in demand for housing in 2022 was 131,700 or 108 percent,” it said.

The report further pointed out that existing official records do not disaggregate permits issued to NPRs already residing in Canada.

“Permanent residents and NPRs by country of residence is currently not published by IRCC or Statistics Canada. The figures presented here are based on special tabulations of arrivals by country of residence obtained from IRCC.”

Extensions

Tal noted that during the COVID-19 pandemic, many NPRs remained in Canada under expired visas.

“Many of those not obtaining permanent residency in the interim are now likely to receive NPR extensions,” he said.

The economist added he does not expect any of the trends to reverse in 2023. Instead, “they might intensify.”

“Note that just under 340,000 CUAET visa holders from 2022 have not arrived in Canada, while most of the 300,000 not approved remain outstanding and are not yet processed,” he said.

“A large share of those is likely to be approved in early 2023, making many newcomers eligible to arrive in Canada any time thereafter.”