Canada’s population growth stresses need for social infrastructure action

A new report says Canada’s housing crisis and the strain on social services could get worse as the country’s population continues to surge.

The TD Bank research notes 1.2-million people were added to Canada’s population over the last year — a portion of that due to record immigration.

It says this is good for the labour shortage and the economy, but the report warns if governments don’t do enough to make sure social infrastructure keeps pace with the population surge, there will be challenges.

“To set the country up for success, government policies also need to implement an appropriate infrastructure to help bring the best out of workers and families,” Chief Economist and SVP of TD Bank Group Beata Caranci said in a Q&A posted by the bank.

“We shouldn’t be too short-sighted on the immediate demands of employers. Population growth needs balance over the long-term. Following a surge in population, consideration should be given to lower levels in other years to allow social systems to catch up. This way, the economic pie won’t just grow in size, but the quality will increase as well.”

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The report explains Canada’s housing shortfall could grow by another half a million units and interest rates could rise by another 50 basis points.

Steve Pomeroy, an expert advisor with the Canadian Housing Evidence Collaborative at McMaster University, tells CityNews this will also have an impact on home prices.

“That will put pressure on the existing stock and prices will go up,” he explained.

Meanwhile, the TD report says some social services like health care may see further capacity issues.

The report is urging policymakers to balance population growth with infrastructure priorities.

It says while Canada sees benefits from international recruitment because of its “ability to quickly pivot on the policy front,” those positives “erode if population growth occurs too fast relative to a country’s commitment to plan and absorb new entrants within the economic and social infrastructure.”

“Canada was already on its back foot in meeting housing demand, and this was also true in hospital beds on a per capita basis. These chronic tensions can quickly become acute for provinces and cities that absorb a higher population share. As dislocations widen, it creates an even larger come-from-behind strategy in addressing housing affordability and quality of life issues,” Caranci explained.

The Liberals have vowed renewed action on these issues after the latest cabinet shuffle, while the Conservatives have made affordability and housing a key point of attack on the Trudeau government, seeing a boost in support amid these criticisms.

“I met a 42-year-old carpenter who’s living in his car for the first time in his life,” Conservative Leader Pierre Poilievre said Friday.

“We’ve built up significantly the social supports available in Canada for families with no children, for seniors,” Finance Minister Chrystia Freeland said on CPAC of some of the actions the government has taken.