Population Crisis Part 1: The Bad News

Well, it’s safe to say that our federal government has officially lost the plot. Immigration numbers have exploded, and Trudeau has done absolutely nothing to prepare for the mass amounts of newcomers flowing in. Pre-Trudeau, we were receiving on average 200,000 immigrants per year. Under Trudeau, that number ramped up to 400,000, then 500,000, then 1,200,000.

Don’t get me wrong – I’m all for immigration. There are tons of social, cultural, and economic benefits when it’s handled properly. But when you’re letting in 1,200,000 new Canadians every year without considering how it will impact things like healthcare, infrastructure, and housing, it’s a disaster waiting to happen.

Of course, just like with anything else, it’s not all bad news. But maybe we’ll start the bad news and then get to the good news. 

From the Mouth of the Minister

Finance Minister Chrystia Freeland was recently quoted saying the following:

“Immigration is a huge economic strength and a real driver of our economic growth at a time when all of the industrialized countries in the world are facing huge demographic challenges. Canada has the social capacity to welcome immigrants.” 

I’m not exactly sure what “social capacity” is. I have a feeling Freeland doesn’t either. But what I do know is that it certainly won’t put roofs over the heads of Canadians who need them. There’s no doubt our resources will be strained as millions of newcomers flood in over the next few years.

A Big Six Bank Sounds the Alarm

A special report by the National Bank of Canada confirmed this. We rarely see any of the Big Six Banks put out such a scathing report, which tells us that this must be a critical situation. I recommend everybody read this. Here are the quotes I found to be most alarming:

• “Canada’s population growth in 2023 was 3.2%, five times higher than the OECD average.”
• “The supply deficit reached a new record of only one housing starts for every 4.2 people entering the working-age population (compared to the historical average of 1.8).”
• “Canada would need to double its housing construction capacity to approximately 700,000 starts per year, an unattainable goal.”

We’ve got a big program on our hands, and that problem according to the National Bank report is a population trap. What’s a population trap you ask? It’s formally defined as “a situation where no increase in living standards is possible, because the population is growing so fast that all available savings are needed to maintain the existing capital labour ratio.”

In other words, we’re all working harder, faster, and longer just to maintain the same lifestyle. This is completely unacceptable. We shouldn’t have to worry about strain on our healthcare system or scarcity in our housing market because our government is incompetent. 

The Bottom Line

The government needs to step up and make some meaningful changes to our immigration strategy. Things are going to get harder before they get any easier if they don’t. But as I always say, in challenging times lies opportunity. Stay tuned for Part 2 of this article where we’ll talk about how you can turn this bad news into good news.

Your best interest is my only interest. I reply to all questions and I welcome your comments. Like this article? Share with a friend.

Steve Garganis: 416-224-0114; steve@canadamortgagenews.ca