A majority of Canadians sees increasing immigration as an economic boon, and nearly half support this year’s target, despite a housing shortage that threatens to further drive up real estate prices and rents.
(Bloomberg) — A majority of Canadians sees increasing immigration as an economic boon, and nearly half support this year’s target, despite a housing shortage that threatens to further drive up real estate prices and rents.
Polling by Nanos Research Group for Bloomberg News shows 52% of respondents say Prime Minister Justin Trudeau’s plan to increase the number of new permanent residents each year will have a positive impact on Canada’s economy. That compares with 38% who see the increase as a negative.
Public support for high levels of immigration sets Canada apart from many of its peer countries and gives Trudeau’s government leeway to steadily boost immigration targets, reaching half a million newcomers by 2025. Trudeau plans to welcome 465,000 permanent residents in 2023, up from a record 431,000 last year.
That increasing flow of newcomers has Canada seeing the fastest rate of population growth among the Group of Seven, despite facing the same demographic challenges as other advanced economies. Census data show that immigrants make up about one quarter of the country’s 39 million people.
Nearly half of respondents in the Nanos poll say this year’s target is appropriate, an increase of 10 percentage points from a November 2020 survey. About a third said Canada should accept fewer permanent residents this year, while 15% wanted the country to bring in more people.
While most Canadians see immigration as beneficial for the economy, explosive population growth in urban centers has sent rents soaring, and forced many people to leave major cities to search for affordable housing elsewhere. A surge of asylum seekers entering Quebec from upstate New York is also creating friction with the US ahead of President Joe Biden’s visit to Canada later this month.
Even though benchmark home prices plunged 15% from last year’s peak as higher interest rates squeezed buyers, the bottom of the downturn is in sight and a recovery is expected later this year and into 2024, according to Canada’s biggest lender. The rebound will be underpinned by immigration and population growth, Robert Hogue, an economist at Royal Bank of Canada, said in a report this week.
“Booming immigration will fuel demand through the medium term, raising the odds of deep supply shortages in the future if homebuilding fails to pick up materially,” Hogue said, adding that housing stock must expand by at least 270,000 units per year by 2025 to accommodate the growth in households.
The Nanos survey of 1,012 people was conducted by phone and online between Feb. 26 to March 1. It’s considered accurate within 3 percentage points, 19 times out of 20.
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