Under pressure, feds make another move to ease population crunch
Feeling the heat over its damaging policies over migration levels, the federal government now says it will reduce the number of nonpermanent residents in the country. That move follows plans to curtail the number of foreign students coming to the country.
Neither move actually rolls back the massive increase in population, but only slows the pace of growth.
Nor has the government acknowledged that the harm done to the housing market, the health care system and the standard of living of Canadians was entirely of its own making.
The changes don’t likely reflect that Ottawa recognizes the problems it created, but that the government recognizes Canadians are increasingly aware of who’s to blame. With the Trudeau government facing the prospect of a decisive defeat in the next election, we can perhaps expect more such announcements.
Many others have long seen that the issue with housing prices, for instance, is more about demand than it is about supply, despite the rush to push through all kinds of development that benefit a few rather than the many.
The demand side has been on Robert Kavcic’s radar for a while. A senior economist at the Bank of Montreal, he’s written about the issue, including issuing a note following last week’s announcement that Ottawa is looking to reduce the share of nonpermanent residents (NPR) to five per cent from 6.25 per cent over the next three years. (That population is currently estimated at 2.5 million.)
“If these targets are met, while permanent resident inflows continue as planned and net births follow recent trends, we judge that Canadian population growth could grind down closer to 1% from north of 3% today,” he writes.
“In order to hit the 5% population share, Canada will need to pivot from net NPR inflows of 800k per year today, to net outflows of more than 100k in the coming years. That will result in less upward pressure on rents, housing and services inflation. Expected underlying population growth of around 1% would continue to lift demand, but the curve will now be shifting out at a much more serviceable pace.”
Ottawa is also making changes to the Temporary Foreign Worker Program. As of May 1, those in sectors such as the hospitality industry will see the number of staff they can hire through the program reduced to 20 per cent from 30 per cent. Workers coming in to fill such jobs have been a big part of the population surge, even though such low-wage workers present other problems for the economy.
While not a panacea, some downward pressure on the demand side should help, particularly on the housing front. Canada Mortgage and Housing Corp. notes that shelter prices have climbed by 6.5 per cent over the past year alone, with rental costs up 8.2 per cent.
We’ve had plenty of announcements about housing policies and even specific builds from governments of all levels, though all would prove fruitless given expected population growth. The latest changes from Ottawa could help, but aren’t the significant reductions that would really aid those looking to buy or rent.
The housing crisis understandably tops the list of issues identified by Canadians. Here in Ontario, it’s led to a host of actions on the part of the Ford government, not all of them well thought-out.
The focus has been on the supply side, hastily making changes to the likes of planning regulations and neighbourhood densities with little consideration to the actual impacts.
For the most part, no real solutions have been offered up, only lip service. That’s true from every level of government.
The root of many problems, from today’s skyrocketing housing prices to environmental degradation, is never addressed: growth that’s been well beyond the ability of our infrastructure and our society to adjust.
Only now, largely due to a mounting public backlash, are we seeing more discussion about population numbers. We’ve had years of short-term thinking, and there’s still no sign that moving away from growth will prevail.
That’s not to say that degrowth presents some challenges. A shrinking population, for instance, would mean fewer workers supporting a growing number of seniors, a group drawing pensions and making large demands on health care and other social services. This could mean large tax increases and deep cuts in programs.
Globally, lower populations reduce the number of consumers, throwing out of kilter the trade patterns, exchange rates and other monetary policies we’ve come to take for granted.
Aging populations are a reality pretty much everywhere. Even without depopulation, we’re going to have to rethink policies such as pay-as-you-go pensions and even the generosity of our social programs. That kind of thinking is beyond the pale for our politicians, obsessed as they are with only the next election.
Still, there are compelling reasons to opt for a shrinking population. There are many positives. The environment would stand to benefit – fewer of us means less pollution and more room for other species. The quality of life experienced by many of us would improve. Labour shortages would lead to better working conditions. A surplus of housing would lead to improvements in choice and affordability. The pressure on farmland would decrease dramatically. In fact, previously developed land could be reclaimed or naturalized.
The transition from growth-is-everything to small-is-beautiful won’t come without pain. But we’ve already been through a number of transitions in just the past few hundred years, beginning with the Industrial Revolution. Even today, we’re constantly told by business advocates and their government supporters that the economy is changing yet again, to a post-industrial, information-driven age. That’s the rationale for sending manufacturing jobs overseas, though little is said of the service jobs that have followed.