A recent report by Desjardins Economic Studies highlighted that economists recommend inviting more skilled newcomers to Canada. The report revealed that Canada must continue to welcome immigrants who can help fill labor shortages in the construction sector. The report further revealed that certain hurdles prevent workers from contributing to their full potential. Therefore, it is important that the government thinks about reducing discrimination & harassment in the construction sector.
This suggestion comes as the nation experiences a historic housing affordability crisis, largely driven by a lack of supply to meet the demands of a rapidly growing population.
In the third quarter of 2023, Statistics Canada released data demonstrating that Canada’s population had reached over 40,528,396 people. This was an increase of 430,635 over the previous quarter & around 500,000 since the milestone of 40,000,000 reached in June 2023.
The challenges this poses to maintaining housing affordability in Canada are well-documented. The CMHC, i.e., Canada Mortgage & Housing Corporation, estimated that the nation will require over 3,5 million extra units on top of what is already being built to support Canada’s current & growing population.
In the interim, the most recent data from the Canadian Real Estate Association shows that the average price of a home in Canada is $657,145 as of December 2023. However, it is much higher in densely populated cities like Toronto or Vancouver, where homes are often priced at over one million.
Non-Permanent Residents Not Working In The Construction Sector
As economists recommend inviting more skilled newcomers to Canada, the report states that among the top 20 employment industries in Canada, construction is in the 15th position. Moreover, using data from Census 2021, the report found that NPRs & immigrants made up less than 22% of Canada’s construction workforce.
This demonstrates that there has been little growth since similar data was collected in 2019. Furthermore, it was found that around 21% of newcomers worked in construction professions.
In addition, a recent BoC report found that just 5% of employed NPRs go into construction as their primary job. This implies that NPRs are the fastest-growing segment of the population, but they are working in construction jobs.
Costs & Productivity Is Also A Factor
The report demonstrates that increased immigration isn’t the only factor involved in the housing shortage. For instance, it notes that the cost of building materials is a 10-year high. This is exacerbated by supply-chain disruptions throughout the pandemic & high-interest rates presently.
CMHC estimates that the high costs will cause 40% of the residential developers to reduce the number of future projects, while over 30% will put new projects on the back burner.
The housing sector is also affected by low productivity. The report states that productivity in the sector has been flat/ declining & has some suggestions on how to increase production to meet demand. One of the suggestions is to create a catalog of pre-approved building plans. This is a strategy that Sean Fraser has endorsed.
In addition, pre-approved plans for houses in Canada should cut down on the time it takes to get municipal approval & financing.
More Strategic Immigration
In the end, the report states that economists recommend inviting more skilled newcomers to Canada. It notes that in 2022, around 455 new PRs became permanent residents via FSTP. However, there were no Express Entry draws for FSTP applicants in 2023.
A report by the Royal Bank of Canada echoes this sentiment, stating that Canada needs to be strategic in selecting immigrants who can become future immigrants with strong long-term economic prospects, including the ones outside highly-educated fields.
IRCC states that it is working to invite skilled newcomers to help in sectors that are dealing with a labor shortage. In May 2023, IRCC introduced category-based selection draws for Express Entry applicants with human capital factors/ professions that are in demand in Canada. However, IRCC held only two draws inviting these applicants, thus issuing a total of 2,500 ITAs for Express Entry applicants with experience in the trades profession.