Immigration cap may cut home supply gap by 45% — if Ottawa’s math is right

The federal government’s efforts to aggressively curb immigration levels in the years ahead could cut Canada’s housing supply gap nearly in half, the parliamentary budget officer projects — assuming Ottawa is able to execute those plans as advertised.
Canada’s fiscal watchdog released a report Friday crunching the numbers on Ottawa’s plans to reduce immigration levels through to 2027, starting with a 21 per cent reduction in new permanent residents next year.
Those policies call for a “pause” on population growth in 2025 and 2026 — shifts that the PBO said would actually see the Canadian population contract somewhat for the first time in its history.
The PBO noted that “the Government projects that the Canadian population will decline by 0.2 per cent in both 2025 and 2026, before returning to population growth of 0.8 per cent in 2027.”
The PBO said in its Friday report that the new trajectory for Canada’s population growth would drastically impact the country’s housing supply gap.
If Ottawa is successful in implementing the new population limits, the housing supply gap would stand at 658,000 units in 2030, the PBO said Friday. That’s down 45 per cent from the office’s projections before the new immigration targets were announced.
In order to fill that gap, Canada would need to ramp up the pace of home construction to build an average of 110,000 additional units annually between 2025 and 2030, the PBO said. These figures account for Ottawa’s other already announced measures aimed at stimulating homebuilding.
Canada would need to build some 2.3 million housing units between 2025 and 2030 to close the housing gap, and is currently on pace to complete 1.7 million homes by that time, according to the PBO.
But the watchdog also warned that the diminished housing gap assumes Ottawa is successful in reducing the inflow of newcomers to the country.
The PBO said it judges there is “significant risk to the demographic projection” tabled by the Liberal government, particularly as it relates to the number of non-permanent residents (NPR) expected to leave the country in order to hit those targets.
“Excluding individuals who will transition to permanent residency, the plan assumes that 2.8 million temporary residents will leave the country over the next three years—equivalent to 93 per cent of the current NPR population,” the report noted.
The PBO cautions that its housing gap estimates are therefore “uncertain” and “likely represent upper-bound estimates.”
Immigration Minister Marc Miller on Wednesday said Ottawa is always looking at “what measures that Canada needs to take to ramp up enforcement” and pointed to what he said were record levels of removals of temporary visa and work permit holders who choose to stay illegally.
Asked if that means more resources, including additional Canada Border Services Agency (CBSA) officers, Miller said, “that’s how it works.”
The government has been pressed by opposition parties and provinces on its plan to add additional resources at the U.S.-Canada border in anticipation of a potential increase in people seeking to enter Canada from the U.S., where president-elect Donald Trump has vowed mass deportations.
The government says the CBSA carried out 11,444 removals from 2019 to 2020, which was the highest number in the previous five years. However, CBSA figures tabled in Parliament early this year suggest most people who received deportation letters in the last eight years remain in Canada, which the Conservative Party says suggests a lack of enforcement.
— with files from Global News’ Sean Boynton