Why CANADA won't be able to receive so many IMMIGRANTS any longer?

the Canadian population is getting older on the one hand people are living longer and on the other women are having fewer children than before life expectancy at Birth in Canada is 82 years one of the highest in the world and the fertility rate has fallen to 1.5 children per woman in 1960 it was 3.8 so Canada wants more people to compensate for its aging population in fact in 2016 a government report was published proposing the goal of reaching a population of 100 million by the year two thousand one hundred that is almost tripling the current population of 38 million this is why Canada has one of the most ambitious immigration programs in the world for example in 2022 it welcomed more than 437 000 new immigrants the highest number in one year in Canada's history so the questions are why Canada really wants 100 million people but why is it not sustainable to continue to welcome so many immigrants in addition to needing new labor to replace those who are retiring and to compensate for the low number of new babies being born Canada wants to attract Millions more immigrants because it wants to populate in the long term the three Northern provinces of the country which occupy almost 40 percent of the territory but are only inhabited by about 115 000 people very few inhabitants to protect exploit and control this part of the country it is estimated that 22 percent of the unexploited hydrocarbon reserves are located in the Arctic that is the northern border of the country and as this area is melting opportunities are being created to establish new shipping routes and exploit resources such as oil and gas so populating Canada's North to take advantage of the economic tourism and Commercial potential of this region is one of the government's objectives in welcoming so many immigrants however there is a key reason to think that it will not be able to sustain the pace of immigrants that are arriving annually to the country the reason is the following most arriving in forthcoming immigrants do not choose to live in Canada's cold and uninhabited North but in the South close to the United States where the majority of the population lives sixty percent of Canadians live in just two provinces Ontario and Quebec so it is to be expected that new immigrants will arrive where there are job opportunities better quality of life and where they may have some connections that is in cities like Toronto Montreal and Vancouver and this presents a problem because there is not enough housing to provide for so many incoming immigrants in other words this sudden population growth is going at a much faster Pace than housing construction this has cost housing rents to rise to levels that exceed what most immigrants can afford an estimated one-third of immigrants settle in Toronto the country's largest metropolitan area with 6.2 million residents and annual rent increases in this city range from 10 to 26 percent and a revealing fact is that for every two immigrants who arrive in Toronto at least one leaves the city due to the high cost of housing and the scarce Supply according to Craig rutton director of policy at the Toronto Board of Trade strong demand from immigrants caused the vacancy rate to drop to 1.9 percent the lowest in 21 years but the increase in rental prices is not only due to the massive influx of immigrants when the pandemic began central banks around the world lowered their reference interest rates meaning that borrowing money became very cheap so people began to take on debt to buy homes even high-income families bought their second or third properties on the suburbs to escape the lockdowns all this cost housing prices to Skyrocket in most cities around the world in Canada specifically in 2022 buying a home has not been this difficult and expensive for over 40 years since the housing bubble of 1981. in 2023 housing prices began to fall however there is another problem due to high inflation rates the Canadian Central Bank quickly raised its interest rates to 4.5 percent the highest level in the last 15 years consequently the cost of borrowing to buy a property has also increased which continues to make home ownership unaffordable for many Canadians and this forces them to stay longer paying rent rather than buying a home so in a few words the high number of immigrants arriving annually is putting pressure on rental prices and the high interest rates for borrowing is forcing Canadians who wanted to buy to stay longer in the rental market which puts even more pressure on Rising prices due to this situation the Canadian government issued a law in early 2023 that bans foreigners from buying Residential Properties in the country for two years those who violate this law face a fine of ten thousand dollars the idea is that by Banning foreigners from buying housing demand will decrease and therefore prices will decrease this stated Canada's Minister of Housing and diversity and inclusion through this legislation we're taking action to ensure that housing is owned by Canadians we will continue to do whatever we can to ensure that all residents of this country have a home that is Affordable and that meets their needs this statement sounds fair but mostly populist because this move to ban foreigners from buying housing will have no effect on prices but it is common for most politicians to blame some problem on an external factor in this case blaming foreign investors for Canada's housing problem this measure will probably not have much of an effect because foreign owners do not represent a significant share of real estate transactions at least not enough to make a difference in the market in the province of British Columbia only 1.1 percent of home sales involve a foreign buyer even in British Columbia they have already tried to discourage non-canadians from buying homes by imposing an additional 20 tax however prices have not stopped Rising a real solution lies in increasing the supply of housing which means building more but since this is a much more difficult issue to address the government prefers to emphasize such restrictions on foreign investors what a measure like this can do is cause uncertainty among investors for fear that a stronger measure will be taken in the future therefore if Canada wants to attract millions of immigrants it would have to be consistent and create laws not to restrict demand but to increase the supply of housing that is to promote the construction of new units however this is a complex issue because there are restrictive zoning regulations in large cities that limit construction but if the problem is not addressed new immigrants will not be able to afford the rising costs of Housing and will end up leaving the country thank you for watching see you in the next video

Channel: Economics Nation

Views: 389,499

Keywords: economics nation, canada economy, canada immigration, justin trude, justin trudeau immigration

Id: FtmxVcfM8hk

Length: 7min 5sec (425 seconds)

Published: Fri Mar 10 2023