Immigration will cut Housing Gaps, but by how much?

Immigration Cuts May Not Solve Canada’s Housing Shortage: PBO Report

The federal government might be overestimating how much its immigration cuts will help Canada’s housing shortage, according to a report by the Office of the Parliamentary Budget Officer (PBO).

The report says Canada’s housing gap—the number of homes needed to meet demand—could shrink by 45% by 2030, assuming the government’s population projections for its immigration plan are correct. However, the PBO expressed doubts about those projections, warning there’s a “significant risk” in the assumptions used for the 2025-2027 immigration plan.

The PBO also noted its predictions rely on the assumption that some non-permanent residents, like those with expired permits or visas, will leave the country. It cautioned that these estimates are uncertain and likely on the higher side.

In October, the Liberal government announced plans to reduce the number of permanent residents coming to Canada over the next three years. This could lead to a 0.2% population decline in 2025 and 2026—the first annual population drop in Canada’s history, according to the PBO.

The PBO estimates that Canada needs to build 1.2 million homes by 2030 to meet housing demands. It says the revised immigration plan could reduce this shortfall by 534,000 homes, or 45%. However, the government’s own estimates suggest an even bigger reduction—670,000 homes—by 2027.

The difference in estimates may come from assumptions about the age, location, and household types of people leaving Canada under the immigration plan, the PBO explained.

Immigration Minister Marc Miller responded, saying the report confirms the immigration cuts will help reduce the housing gap. However, he emphasized that immigration remains essential for growing Canada’s housing supply.

“Immigrants are not to blame for the housing crisis,” Miller said. “Like everyone else in Canada, they deserve the chance to succeed.”

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