Canada’s Resurgent Population Growth and Exodus from Unaffordability

Commentary, Housing Affordability, Wendell Cox

Canada is experiencing resurgent growth, according to the latest population estimates from Statistics Canada. Between 2015 and 2019, the nation added 1.30 percent to its population annually. This is up about one-third from the annual rate between 2010 and 2015. The growth surge has been even greater in the larger labor markets (the 44 Census Metropolitan Areas [CMAs] and Census Agglomerations [CAs] over 100,000 population), where the annual rate has risen about approximately 30 percent, from 1.20 percent to 1.57 percent. Given the urbanizing tendency throughout the world, it is surprising that areas outside the largest labor markets, which include both urban and rural areas, experienced the greatest population rate increase, at 38 percent, from 0.39 percent to 0.53 percent.

Statistics Canada explained the increased population growth as follows:

This trend is linked to higher targets for permanent immigration, as defined by Immigration, Refugees and Citizenship Canada, and to various government programs that draw many temporary workers and foreign students to the country.

Growth in the Labor Markets (CMAs and Larger CAs)

Detailed data is provided by labor market in the table at the bottom of the article.

Annualized population growth increased in 37 of the 44 labor markets. Among the metropolitan areas with more than 1,000,000 population, growth increased in Toronto, Montréal and Ottawa-Gatinau. However, the rate of population growth fell in Calgary and Edmonton, which have suffered from a virtual regional recession due to lower oil prices and difficulties in transporting petroleum to the market. Vancouver also experienced a decline in growth.

All of the 17 metropolitan areas except for Quebec and St. John’s (Newfoundland and Labrador) between 200,000 and 1,000,000 population had greater annual growth in the last four years than in the five years to 2015.

Continuing Urban Dispersion

Statistics Canada further noted that urban expansion and suburbanization continued to be strong:

Urban spread, as measured by the expansion of peripheral municipalities in metropolitan areas, continued over the past year in Canada’s largest CMAs. Most often, the municipalities with the strongest growth were in suburban areas. For example, the municipalities of East Gwillimbury (+9.5%) and Milton (+5.0%) had the highest growth in the Toronto CMA (+2.0%). Similarly, Carignan (+4.6%) and Mirabel (+4.1%) recorded the largest population growth in the Montréal CMA (+1.5%).

While the largest labor markets continued to grow (Toronto, Montréal and Vancouver), they experienced substantial levels of domestic outmigration to areas external, but nearby.

Moreover, the three largest CMAs experienced urban spread beyond their borders. In 2018/2019, the CMAs of Toronto, Montréal and Vancouver continued to post steady population growth, mainly due to international migration. However, they also continued to lose people through their migratory exchanges with other regions within their respective provinces. The losses in Toronto (-47,838), Vancouver (-14,241) and Montréal (-14,117) contributed to the growth of areas just outside these CMAs.

Fastest Growing Labor Markets

The labor markets with the fastest growth illustrate this point (Table 1, below). Each of the three largest labor markets (Toronto, Montréal and Vancouver) have house prices relative to incomes that are much higher than the rest of Canada and much higher than nearby labor markets. It seems likely that these differentials are contributing to the outmigration of residents from the core metropolitan areas to other parts of the provinces.

Vancouver had the second worst major market housing affordability in the recently released 16th Annual Demographia Housing Affordability Survey, trailing only Hong Kong. Since 2005, Vancouver’s price-to-income ratio (median multiple) has increased from 5.3 in 2005 to 11.9 in 2018 — house prices have increased about 125 percent relative to incomes. Housing is less unaffordable in other BC labor markets. Chilliwack, BC is 100 kilometers (60 miles) from Vancouver is the fastest growing of the 44 labor markets, adding 2.8 percent to its population annually. Abbotsford, 70 kilometers (45 miles) from Vancouver had the 4th strongest annual population growth rate. Other fast growing BC markets included Kelowna (5th) Kamloops (7th) and Nanaimo (9th).

Toronto had the 6th least affordable housing in the 16th Annual Demographia Housing Affordability Survey. Housing affordability has also been deteriorating rapidly, with its price-to-income ratio (“median multiple) increasing from 5.1 in 2010 to 8.6 as Toronto house prices have increased nearly 70 percent relative to incomes. Less unaffordable markets outside Toronto have added population more quickly. Kitchener-Cambridge-Waterloo, an important technology center, is 110 kilometers (65 miles) from Toronto and ranks 3rd in annual growth. Annual growth is now 2.5 times that of 2010-2015. London, ranked 8th is 190 kilometers away (115 miles) and now has annual growth four times that of the early decade.

The trend away from less affordable housing seems likely to continue, as it seems unlikely that there will be any serious improvement in the largest markets.

There has also been strong growth in the Prairies, with Saskatoon the 2nd fastest growing, Regina as 6th fastest growing, along with Edmonton at 10th. Edmonton is the only labor market with more than 1,000,000 residents that ranked in the top 10 in annual population growth from 2015 to 2019. Edmonton, unlike all of the other top 10, has seen its growth rate drop in the last four years.

Canada’s Emerging Trends

It will be interesting to follow these emerging trends. Canada has begun to “swim upstream” with respect to population dynamics, in comparison with so many nations that are gaining population at record low rates or even seeing their numbers drop. At the same time, without material improvement in housing affordability in the three largest labor markets, net domestic migration seems poised to increase.


Table 1

 


Photograph: Chilliwack, British Columbia. Fastest growing labor market over 100,000 population in Canada (by author).

 

*Republished from www.newgeography.com

 

Wendell Cox is a Senior Fellow with the Frontier Centre for Public Policy with expertise in housing affordability and municipal policy. In addition he is principal of Demographia, an international public policy and demographics firm. He is a Senior Fellow of the Center for Opportunity Urbanism (US), Senior Fellow for Housing Affordability and Municipal Policy for the Frontier Centre for Public Policy (Canada), and a member of the Board of Advisors of the Center for Demographics and Policy at Chapman University (California). He is co-author of the “Demographia International Housing Affordability Survey” and author of “Demographia World Urban Areas” and “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.” He was appointed by Mayor Tom Bradley to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. Speaker of the House of Representatives appointed him to the Amtrak Reform Council. He served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.