Housing target falls 1.5M units short, CIBC says

The Canadian government is underestimating the number of new homes needed to address a spiralling affordability crisis by about 1.5 million units, according to Canadian Imperial Bank of Commerce research.

While Canada’s national housing agency says the country needs to add 3.5 million extra units by 2030 to make shelter affordable, the true number is actually about five million additional homes, CIBC economist Benjamin Tal wrote in a report Tuesday.

Tal traced the problem to population figures he says don’t adequately count non-permanent residents.

Much of Canada’s recent population growth has come through nonpermanent resident programs — foreign students and temporary workers — which the federal government did not cap and were mainly driven by demand from educational institutions and employers. The Trudeau government’s latest move was to introduce a cap on the number of foreign students.

But CIBC’s Tal says even if that cap works as intended, growth in other types of non-permanent residents would still ensure about two per cent annualized population growth, or six million new people over the next seven years.

“There are no credible forecasts, targets or capacity plans across governments for non-permanent residents — the population which accounts for the vast majority of the planning shortfall. That must change,” he wrote.

“Meaningful forecasting, targets and integrated planning must be conducted for all permanent and temporary visa approvals to be meaningful.”

A CIBC economist says Canada needs five million more homes by 2030 to make shelter affordable