Trudeau’s immigration cut will narrow housing gap, watchdog says – BNN Bloomberg

(Bloomberg) — Prime Minister Justin Trudeau’s plan to curb the influx of newcomers will narrow the country’s gap between housing supply and demand, according to a budget watchdog.

If Trudeau is successful in curbing immigration over the next three years, it would reduce the housing gap by 534,000 units, or 45%, by 2030, said the Office of the Parliamentary Budget Officer, which provides independent analysis to help lawmakers scrutinize the government’s activities.

While slowing population growth may help reduce the severity of the shortage, Canada’s housing supply will still fall short of demand by 658,000 units by 2030, according to the bureau’s report released Friday. It highlights the ongoing challenge of infrastructure in a country that is home to some of the world’s hottest property markets.

Canada would require a total of 2.3 million housing completions by the end of this decade to close the housing gap, the watchdog estimates. This translates into 390,000 total units completed annually on average over the next five years. Last year, housing starts fell to about 224,000 units.

Trudeau’s government last month cut its annual target for permanent residents by more than 20%, saying it wants to halt population growth by shrinking the number of temporary residents – such as international students and foreign workers – through an exodus of more than a million people.

However, the office noted that there is “significant risk” to the projection in the government’s plan, particularly the estimated outflows. “The plan assumes that 2.8 million temporary residents will leave the country over the next three years,” equivalent to 93% of the group’s current population.

Immigration Minister Marc Miller said earlier this week that the government is focused on making sure “those people who don’t want to leave after due process actually go.” Miller cited record increases in the number of migrants removed from Canada this year as evidence that “enforcement is happening.”

The government has set a target of more than doubling the pace of construction to add 3.9 million homes by 2031 as it tries to calm the housing crunch and reverse waning popularity. But pro-immigrant groups have warned that the migration restriction could lead to a shortage of skilled workers in sectors including construction.

–With assistance from Thomas Seal.

(Updates with more details from the report; adds context and commentary.)

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