The Liberal government’s recent reduction of immigration levels will nearly cut the need for new housing units in half by 2030, says a new report from the Parliamentary Budget Officer.
“Assuming that the population evolves in line with the government’s projection, we estimate that the 2025-2027 immigration levels plan will reduce Canada’s housing gap in 2030 by 534,000 units (45 per cent),” the report published Friday said.
“After accounting for the government’s new immigration plan, we estimate Canada’s housing gap in 2030 to be 658,000 units,” taking into account the number of housing units expected to be built by then, the report added.
The federal government announced last month that it was cutting the projected number of new permanent residents from 485,000 this year to 395,000 in 2025, with further cuts to 380,000 in 2026 and 365,000 in 2027.
Under the previous plan released a year ago, Canada was expected to admit about 500,000 in both 2025 and 2026.
When Immigration Minister Marc Miller announced the cuts in October, his office said it would create a 0.2 per cent population decline over the next two years and “reduce the housing supply gap by approximately 670,000 units” over the next few years.
The PBO report says there is “significant risk” to the federal government’s immigration predictions, including the projected “outflow of non-permanent residents.”
It says the uncertainty attached to the Liberal government’s immigration predictions means the forecast 45 per cent reduction in the housing gap may “represent upper-bound estimates.”
To stay on track for a housing gap of 658,000 units by 2030, Canada will need to build about 2.3 million homes by then — an average of about 390,000 units per year between 2025 and 2030.
Immigration and housing
The national population rose by about 1.3 million between Jan. 1, 2023 and Jan. 1, 2024. Statistics Canada said 97.6 per cent of that population growth was the result of immigration.
Miller said the cut in immigration levels would ease pressure on housing, infrastructure and social services.
“These changes will make immigration work for our country so that everyone has access to the quality jobs, homes and supports they need to thrive,” the minister said in October.
Conservative Leader Pierre Poilievre said in January that a Conservative government would “bring the [immigration] numbers in line with the number of houses that are built.”
“It’s very simple math. If you have more families coming than you have housing for them, it’s going to inflate housing prices,” he said.
Poilievre hasn’t fully explained how a government led by him would handle immigration, but he did say it would also consider the number of jobs and doctors available when setting immigration levels.