The Decibel - Canada’s ambitious plan to bring in 500,000 immigrants by 2025

Episode Date: November 29, 2022

The federal government plans to bring in 500,000 immigrants per year by 2025 – but only around 200,000 housing units are being built per year. With a cost-of-living crisis, sky-high housing demand and struggling health care systems, immigrants are often left struggling to settle here in Canada.Matt Lundy, economics reporter with The Globe’s Report on Business, explains what these challenges mean for people who have recently arrived in Canada, and how the federal government plans on tackling them.Questions? Comments? Ideas? E-mail us at [e-mail]

Hi, I'm Mainika Raman-Wellms, and you're listening to The Decibel. The federal government is planning to bring in 500,000 immigrants each year by 2025. With sky-high housing demand, a cost-of-living crisis, and struggling healthcare systems, immigrants are facing an uphill battle settling here in Canada. Matt Lundy is an economics reporter with the Globe's Report on Business. He's here to tell us what these challenges mean for new immigrants to Canada and what the federal government says it's going to do about it. This is The Decibel from The Globe and Mail.

Matt, thank you so much for being here today. Thank you for having me. How much is Canada's population growing now year by year? Over the past year, we've grown by a little more than 700,000 people. In the most recent quarter, it was 285,000. That was the largest the population has grown since Newfoundland became the 10th province. How does that compare to how other countries are growing? So since 2016, we've grown at about double the pace of other G7 countries. So we're talking about, you know, the US, Germany, Japan, countries like that. I mean, Japan has another problem with population because they're actually shrinking. But we are growing at a significantly higher rate than our peer countries are.

And yeah, I mean, it is largely driven by immigration. Okay. And so how fast are we growing now compared to how we used to be growing? Yeah, I mean, it's always been a big part of how we grow our population. But things have definitely picked up, certainly coming around 2015 as the liberals came to power. Like, yes, we are a country that's been growing, but you can see that pace very clearly start to pick up around that time. And if you were to characterize, I guess, how much we're growing from immigration versus just, I guess, the natural kind of birth and death rate, how can we compare that? Yeah. So between 2016 and 2021, this is like the most

recent census period, about 80% of the population growth we've been seeing was through immigration as opposed to like the natural rate of increase, as you said. And that extends to the labor market as well. So the growth in people who are workers, again, that's about 80% of the growth from that coming through immigration. 80% sounds pretty significant then. That's a lot. Oh, yeah. Big time. Okay. So increasing immigration was one of the early promises of the liberal government, as you just mentioned. Can you remind me why though? What did Trudeau say that this was going to do for the country? Yeah, so this has been one of the guiding things for the liberal

parties since they came to power, which is that we need immigration and we need to ramp up immigration because our economy needs it. And time and again, I mean, we've been seeing it over the past seven years from the party, really, that as they bring targets higher for permanent residents, it's usually framed as this is something we need for the economy. This is something that we need as an aging society. And especially recently, as companies have been very frustrated by their ability to find labor, the labor shortages that we hear about all the time, a lot of recent decisions around immigration have been framed around, we need to plug these labor gaps, we need to find workers, and the way to do that is through immigration.

Okay, so I mean, this all sounds positive, I guess, on the surface, but I know it's not quite as straightforward as all of this. So what's the issue here? new goals for permanent residents. It was announced early in November, where we want to ramp up by 2025 to bring in 500,000 permanent residents a year. That's just a target. We often go above that target. The top end of that range is 550,000. But at the same time, as a lot of people have noticed, there is a significant housing shortage in many parts of the country, especially those places with the largest amounts of people like the BC Lower Mainland, Southern Ontario. And we're heading into what is a tough time economically with rising interest rates. A lot of developers are pulling back on their projects. They're not able to build as much as they want.

It's higher financing rates for them. It's less profitability. So from planning through completion, you're talking six, seven, eight years. So if people are pulling back on those plans now, in the future, as we're ramping up immigration, we're going to have less homes than we thought we were going to have. And so this is the type of thing where looking into the future, our housing issues could in fact get worse. And when you say less homes, like do we have, I guess, numbers there? Like how big is the gap between how many people are coming into Canada versus what's actually being built for where people can live? Yeah. So I mentioned that over the past year, we had about 700,000 people added to our population. We built around 220,000 homes during that time.

So it's a ratio of about 3.2 new people for every housing unit. The last census, it was about 2.3 people on average in a home. Of course, a lot of what we're building is these tiny condos in the sky that are like four or 500 square feet. You're not going to get a

family of three or four into a lot of these places, right? So recently, we've seen, frankly, that gap in what we need versus how many people are coming to the country. It's getting worse. And as far as the need and the size of that need, it is massive. Everyone has different estimates on this, but Canada's federal housing agency, CMHC, said we need by 2030, 3.5 million more homes than projected to return affordability back to those levels around 2003 or 2004, which they say is the last time when homes were truly affordable. So we're talking about, it's actually like over 5 million homes, they're saying that we need in the next eight years. And I mean, you'd be hard pressed to find anyone who says that we can pull that off. This sounds like a pretty important thing to think about. If we're bringing a lot of people into the country, people have to have a place to live.

This is a very basic thing, right? Why is this gap so big though, Matt? Why are we not kind of building the demand that's needed? I think a lot of people would point to restrictive zoning policies in a lot of cities. The rules that we have around what you can build and where being very restrictive such that we can't build the homes that we need. Another issue though, is we may not have the homes that we need. Another issue, though, is we may not have the workers that we need. That CMHC, for instance, had another report recently, where they said that we simply don't have enough skilled workers to build the homes. If you talk to people

in the construction industry, they're running full tilt, like to the extent that they can. They struggle to find workers in that industry. So if they're running full tilt like to the extent that they can they struggle to find workers in that industry so if they're running full tilt and we still can't build enough homes what exactly is the solution here now the liberals would say solution is actually more immigration and we're going to target people to build these homes so i guess we'll see how that all nets out so they would say basically well in order to to fix issue, bring in people to the country who can build those homes, construction workers, skilled laborers, essentially then. Is that their argument? Yeah, I think to some extent that is. Like, they are next year going to be running targeted draws for permanent residents, targeting, for instance, nurses, doctors. To address the healthcare issues too, of course, because we

know our system is already strained as it is. Absolutely. As well as the people to build our homes. So this is an interesting development in immigration policy. The government is saying we want to target people perhaps more effectively through immigration to work those jobs. Yeah. And so far we've been talking about big ideas here, big numbers. But of course, there's people behind all of these numbers that are trying to come to Canada to build something here. I'm wondering what this all means for those individuals, Matt. And I know you spoke with a bunch of people. I want to ask you about Ash Gopalani in particular. Can you tell me about him? Yeah, so Ash and his wife recently arrived in Toronto at the end of September. Ash had been waiting a really long time, about three years

before he finally got a decision on permanent residency. There are these huge backlogs of applications right now at the Federal Immigration Department, people are waiting often for years. And so by the time they get here, frankly, the inflation situation is getting worse, the affordability crisis is getting worse. They put their lives on hold for a while and life is just more expensive. Again, it was a very challenging process to find housing. His range for rent was about $1,500 to $1,800 a month. He found something at $1,800, but he doesn't have credit history here, or he is also looking for a job in Canada, him and his wife, right? So landlords, like they see this, a lot of people were asking them, give us a full year's rent upfront. Wow. Yeah, and it's like,

how are you supposed to make that transition? In the end, in this case, he had to settle on six months with the place that he did get. But you're talking about over $10,000 out of your pocket to secure a lease because people think, hey, it's a tight market. It's a fair bit of risk. We don't know you.

We don't know your credit history. So you're gonna have to pay up to get this place. Now that makes the transition of coming here a bit more difficult. You don't have that financial buffer that you thought you would. Yeah. Wow. Yeah. When you kind of explain it like that, that's a lot of money that you thought you would be able to kind of rely on, right? Where you all of a sudden you're in a tighter situation. For people like Ash that you spoke to, Matt, then how does the situation that they're faced with in Canada, how does that compare to what they thought would happen when they got here? Well, I think this puts a lot of financial pressure on people here and they see maybe I can't build a life in Canada as I had envisioned, that it's become so expensive

and it's become so competitive that maybe there aren't the opportunities I thought there were. We'll be back after this message. One place that you specifically looked at was Cape Breton University, Cape Breton, Nova Scotia. What's going on there? Yeah. So they have to grow their revenues gone really hard into foreign enrollments. And like, it is dramatic. So over the past year, like their fall intake for this year was, of foreign students, was 68% higher than it was last year. Almost three quarters of the student body at Cape Breton University are foreign students. Why such a dramatic increase?

There are no restrictions or guidelines, if you will, for study permits in Canada. This has been a real cash cow for post-secondary institutions. Their domestic revenues or the funding that they get through governments has really plateaued for quite a long time. So if you want to grow your revenue, looking toward international students who pay three to five times more in tuition fees than their domestic peers, that is the way you do it. And if the government is not going to be regulating how much is happening in that space, then you have some universities who are just, frankly, bringing up their enrollment to levels that I think is difficult for them to sustain. Like if we look at

Cape Breton University, they're in Sydney, Nova Scotia. It's about 31,000 people in that population. If you add 1,500, 2,000 new international students in one year, that is a ton of new demand for services in that area, especially housing. Where is everyone going to go? And we're actually seeing a bit of a backlash from students there now because they're not totally happy, many of them, with the university experience they're getting. And so let's talk about that university experience then. So what are they actually getting when they arrive there? A recent story that we've seen coming out of Cape Breton University is that there's a lot of anger from students because there's this popular two-year business program.

In fact, I think the majority of students, foreign students there take this program. Most of the classes in that business program are being held in a cineplex movie theater off campus, the lectures. They don't have the capacity for all of these classes actually on campus. And this has erupted recently with a lot of students saying,

this isn't the university experience that I signed up for. Having to take transit nine kilometers off campus for our lectures. Some people have all of their classes off campus in a movie theater. Wow. Yeah. And what about housing? Because this is the big issue that we've been talking about here. Did the university prepare for additional dorms or units for students to live? Like where are they being housed? Yeah, there is a lot of stress in the local housing market, as you would expect. I think there are a lot of locals who thankfully have opened up their homes and renting rooms and whatever. I know that the university is certainly planning for more dorm

space for students as well. But there is a Facebook group that I belong to for foreign students at Cape Breton University. And I'll be honest, every day there are desperate pleas for housing for people who are about to start their studies and can't find something. So I think a lot of people show up looking for any room or really any space that they can get into. There's just, it's a really difficult situation. And within that, you get a lot of scams. This is not a university-led group, by the way.

This is a group of students who have banded together wanting to help their fellow students. They check out listings for international students, many of whom have never been in the country before. Okay, so we've talked a lot about housing. We've mentioned briefly about healthcare too, because this is something that we have to think about as well. We know that there's a shortage of family doctors, nurses right across Canada right now. What do these shortages mean for new immigrants who are coming here and need to access services? Yeah, so we have seen from research that for new immigrants or recent immigrants, And need to access services. to get established in a country to make those connections. But if there are people here, you know, Canadian born citizens who can't find a family doctor who are like 50, 60, who

really would be the most primed to navigate the situation, if they can't find family doctors, then it's going to be really difficult for newcomers. I'm curious, how does the federal government respond to these kinds of criticisms, you know, that they're bringing in all these newcomers without adequately giving them the support or creating the environment where they can feel this support and find housing and find health care? I think they would probably push back on some of these charges to some degree. For instance, they fund settlement agencies. There are hundreds of organizations across the country that help people get settled. That's everything from setting up a resume

to getting established in the banking system, getting your account set up. Really anything you can think of. Language workshops are another thing. And they would probably say, we're increasing funding for these types of things to help people get settled. It's not just about housing. There's so many other things here, as well as the government

is putting a lot of money earlier this year in their federal budget towards housing initiatives. Their goal is to double construction over the next decade. So I think they would say we are trying to get this big ship going in the right direction. But of course, you still have a lot of critics of those efforts that say they're not nearly sufficient for this issue. And we know the topic of immigration can elicit some pretty strong feelings from a lot of people. How do we see this discussion, I guess, playing out in the broader public right now? Yeah, so by and large, Canadians are really welcoming toward immigrants. Time and again, we see surveys that suggest this.

There's a recent poll conducted by Enveronics, which showed that like 85% of Canadians think immigration is good for the economy. We have very positive emotions around this type of thing. I think the danger here is that if things, let's say, get worse on the housing file at a time when we're ramping up immigration, that's potentially dangerous so far as how people feel about immigration. And that could be politically exploited. We see this in other countries where suddenly they start blaming their problems on immigrants, let's say. And so I think that is a potential danger here

where a country that is very open to immigration might start eyeing their neighbors a bit more suspiciously or blaming them for things that are going wrong in the country, when really, I think the focus here should be on policymakers. If we have a plan to increase immigration, frankly, we should have a plan that is commensurate for adding the housing that we need, among other services. What solutions have you heard that are out there to help make sure that people arriving in Canada right now have things like housing and healthcare? What's actually available for people? Yeah, so I think one argument of this is that it's really not about population growth. It's about housing supply. That on one hand, it's like absurd to be talking about population growth in a country of like

39 million people. Like we're roughly the same size population wise as California, but significantly larger. Clearly we can bring in more people. So this is about ramping up home construction. And part of that is liberalizing, I would say, our policies around zoning and allowing, frankly, more homes to be built in more places in a way that is also environmentally friendly. Let's add that. As well, I would say settlement agencies, I'd mentioned them before, they could use more funding. Another thing I've heard is, and this is through a think tank called the Smart Prosperity Institute, having colleges and universities come out with five-year targets to let people know, to let local planners know, this is what we're targeting for our foreign enrollments.

This will give people a bit of a better idea of what's coming down. Because I've heard some stories where a college or university is in a short period of time ramping up their foreign enrollment by like 5,000 students. A city is completely unaware that this is happening. And now it's really on them to find a way to house these people. I mean, that is just like a recipe for disaster, right? So having those sorts of targets, I think would be pretty helpful. Yeah.

Matt, thank you so much for taking the time to explain all this today. Thank you for having me. That's it for today. I'm Mainika Raman-Wilms. Our producers are Madeline White, Cheryl Sutherland, and Rachel Levy-McLaughlin.

David Crosby edits the show. Kasia Mihailovic is our senior producer, and Angela Pichenza is our executive editor. Thanks so much for listening, and I'll talk to you tomorrow.