The Liberals’ recent about-face on immigration levels will cut Canada’s housing gap almost in half by 2030.
According to a report from the Parliamentary Budget Officer published Friday, the Liberals’ 2025-2027 Immigration Levels Plan will reduce the housing gap by 534,000 units, or 45%.
Based on the new reduced immigration levels, the housing gap is estimated to be 658,000 units by 2030 instead of the initially projected 1.2 million units.
The report projected an estimated 1.7 million net housing completions by 2030. Closing the housing gap would require 2.3 million housing completions by 2030, averaging 390,000 completions per year between 2025 and 2030.
“We judge that there is significant risk to the demographic projection presented in the Government’s new immigration plan—particularly to the projected outflow of non-permanent residents,” reads the report. “Our estimated reductions in household formation and the housing gap are uncertain and likely represent upper-bound estimates.”
The Liberals previously announced that they would reduce immigration levels by 135,000 over two years.
The levels plan to reduce Canada’s population by 0.2% over the next two years before returning to a population growth of 0.8%. The number of permanent residents will be reduced from 500,000 to 395,000 next year and then 380,000 in 2026 before reaching the target of 365,000 by 2027.
Immigration accounted for 98% of Canada’s population growth last year; however, 60% of immigrants were temporary residents.
The PBO report highlighted that Canada’s population grew by 1.1 million and 1.2 million in 2023 and 2024, a growth rate of 2.9% and 3.0%, respectively.
Both 2023 and 2024 saw net increases in non-permanent residents of over 700,000. 2025 and 2026 project declines of over 445,000 non-permanent residents.
The report estimates that between 2025 and 2030, housing stock will increase by 280,000 units annually. Therefore, 110,000 additional units need to be built annually to reach 390,000 a year and close the housing gap by 2030.
Without the new immigration plan, 199,000 additional units would need to be built annually.
Prime Minister Justin Trudeau previously promised to build 4 million new homes by 2031, or more than 576,786 houses per year — more than double what is actually projected to be built.
Between 2015 and 2024, Canadian housing starts were anywhere from 180,926 to 258,000 per year, averaging 210,589 built per year, according to the PBO report.
Between 2022 and 2023, housing starts fell by over 12,486 units. However, between 2023 and 2024, housing starts are projected to rise by 16,248 units.
Based on the current average, the Liberals won’t even accomplish their initial goal of the 1.87 million homes expected to be built by 2031, let alone the 4 million new homes promised by Trudeau.
Housing affordability reached an all-time low in Apr. 2024. The average household in Vancouver had to spend 106.3% of its income to cover homeownership costs.
Some of the country’s other most expensive cities, like Victoria and Toronto, featured households having to allot 80.2% and 84.8% of their incomes towards mortgages, respectively.
