Canada’s Immigration Minister, Marc Miller, has shared that he will be assessing the entry of international students and other temporary residents into the country amidst concerns about the housing crisis. In an interview on January 14, Miller acknowledged the complexity of the relationship between immigration and housing. He emphasized that while immigrants are not responsible for rising interest rates, the number of people entering the country needs evaluation.
The housing affordability issue in Canada is a significant concern, with the opposition blaming the Liberal government for deficits and connecting them to increasing interest rates. Conservative Leader Pierre Poilievre proposed a plan to cut spending and tie infrastructure funding to the number of homes allowed to be built in cities. There has been a shift in public opinion, with polls showing that many Canadians believe immigration contributes to the housing crisis and strains the healthcare system. In November, the government maintained its goal of welcoming 500,000 new permanent residents by 2026, but there are no specific targets for temporary residents.
Miller highlighted the need to focus on temporary residents, suggesting potential modifications to postgraduate work permits or controlling their volume. He acknowledged the economic consequences of restricting temporary workers but emphasized the importance of addressing the impact on the housing market. The government aims to intervene in a market where some actors prioritize short-term financial gain over long-term stability. Miller expressed the need for provinces to make changes and signaled federal readiness to act if compliance is lacking.
However, new research warns that blocking the admission of temporary residents could deepen the expected recession in 2024. The analysis suggests that reducing the number of non-permanent residents may lead to a 0.7% drop in Canada’s real GDP in 2024, hindering economic recovery. Policymakers are urged to exercise caution to minimize the negative economic effects of slowing newcomer arrivals too quickly. The paper also suggests that increasing temporary resident admissions could boost GDP but may pose challenges to home affordability and inflation.
