Canada’s Population is Booming While Housing ‘Starts’ Tumble

Canada’s population grew by just over 1.2 million people during the second quarter of 2023. 

That’s the equivalent of adding a city roughly the size of Calgary to Canada’s population in a single year. This represents an annual growth rate of over 3%, the highest growth rate in Canada since the 1950s, and globally, the 9th highest annual population growth rate in the world.

If we compare this period led by our current Prime Minister, Justin Trudeau, to the period led by his father, Pierre Elliot Trudeau, when our population grew by roughly 1.4% per year, Canada’s population is now growing at double that pace. 

While Canada has long been very welcoming of new immigrants, more and more economists are growing extremely concerned that Canada’s population growth strategy is not being coordinated with our housing policies.

While Canada’s population is growing 3X as fast as historical levels, housing completions have not seen any material change in decades, as we can see in the above chart. 

Adding to the concern, the Canadian Mortgage and Housing Corporation (CMHC) reports that Canada’s housing starts have been declining since November 2022, so our housing shortage will only worsen in the future. 

Despite the promises from politicians, economists and housing advocates that the solution to our housing crisis is to increase the supply of homes being built, it’s becoming very obvious that in the near term, governments have no ability to influence how many homes the private sector builds each year. 

The outcome is a housing shortage and crisis that will ultimately affect the poorest households the most. Homeowners have benefited from our housing shortage as home prices have surged over the past ten years. Meanwhile, renters have seen average rents up by double digits across most cities in Canada without benefitting from any of the appreciation of housing assets. 

As long as Canada’s population continues to grow at this rate, and as long as politicians and housing supply advocates pretend that our housing crisis can be solved by rapidly increasing the supply, we can expect this housing affordability crisis to continue.

John Pasalis is President of Realosophy Realty. A specialist in real estate data analysis, John’s research focuses on unlocking micro trends in the Greater Toronto Area real estate market. His research has been utilized by the Bank of Canada, the Canadian Mortgage and Housing Corporation (CMHC) and the International Monetary Fund (IMF).