Why is Housing So Expensive in Ontario?

Increasing Population via Open Door Immigration Raises Housing Prices in Toronto, Ontario, and Canada

Low Supply and High Demand Plus Immigration Equals Even More Demand

Discussions about immigration can be touchy subject matter. But if you are trying to figure out why housing is so expensive in Toronto, you can’t not talk about recent Canadian immigration trends. Terms like xenophobia or racism can easily get thrown around when language or tone tick just off the socially acceptable path. Politically speaking, and I am not political in a meaningful sense, I am a centrist. I believe that the truth often lies somewhere in the middle.

I grew up in and around Toronto’s east end and the suburbs that border it. Throughout my childhood, Toronto and the modern GTA’s boundaries were already a visibly multicultural city. Like many Torontonians, I had friends and coworkers of all colors, races, ethnicities, and religions. I still have a rainbow assortment of friends whom I see at least a couple of times a week.

Canadian Values are on Life Support

I don’t have much racism in me, but I do have a bunch of cultural preferences. I prefer the Judeo-Christian values that made up the early fabric of most Western cultures and in particular the nuances in those values that are especially Canadian. Maybe our manners, sense of right and wrong, respect for law and order, tolerance for different political and cultural views, and the belief that there are certain inalienable rights and standards that all Canadians deserve. I also believe that we as Canadians generally accept that sometimes we have to trade some of our freedoms to protect the health, safety, and freedom of others; this thinking is often lost on our neighbours to the south.

Ultimately, I am a little bit on the left on social issues and probably a little bit right of center on economic issues. On the extreme right they’d call me a communist and on the far left, they’d shout “capitalist pig”. But really, like so many Canadians, I prefer a balanced argument to blindly following a politically derived edict, e.g. I’m on the right, so environment be damned. That’s not me and no politician can convince me otherwise.

Hey, Your Racist Grandpa is Right About This One

It is with great caution that I write the following: There are too many damned immigrants in the GTA. And I don’t say that to the newcomers themselves. I direct it to our Federal leaders who embraced the idea of solving national birthrate and population growth issues with immigration. The criticism of Federal immigration policy is not coming from a place of hate (racism). It is coming from a love of Canadian culture and the values that inform it.

Federal Politicians Get More Voters and Toronto and Vancouver’s Get Higher Housing Costs

According to a late 2023 publication by StatsCan:
Canada’s population was estimated at 40,528,396 on October 1, 2023, an increase of 430,635 people (+1.1%) from July 1, 2023.

Canada’s total population growth for the first nine months of 2023 (+1,030,378 people) had already exceeded the total growth for any other full-year period since Confederation in 1867, including 2022, when there was a record growth.

In the third quarter of 2023, the vast majority (96.0%) of the population growth was due to international migration… [adding pressure to housing, a sector already ridiculously expensive in Canada]
Reference: https://www150.statcan.gc.ca/n1/daily-quotidien/231219/dq231219c-eng.htm

If You Love Stats Check Out This Demographic Breakdown of Ajax >>

Government’s Role in Making Houses in Canada More Expensive

Why is it such a bad idea to simply let everybody in, when acceptance of the downtrodden is a core value we hold so dearly? Well, it is a bad idea when the socio-economic structures and programs and infrastructures cannot handle all of those people.

You have to accept and understand where a bulk of the motivation for this mass immigration is coming from.

Capitalism and the governments and laws and systems that are based on capitalist/Western ideals demand constant real growth of our economic output in order to thrive. The easiest and best example might be the stock market. Stocks get destroyed when the CEO says “We had a very solid year, revenue and profits matched our prior year!”. The analysts don’t want steady-eddy business, they want consistent growth. Forever. Growth on growth, and growth of growth. One way to do this is by growing the pool of workers to contribute to growth of national economic output.

More Canadians Means More Pressure on Already High Housing Prices, Thanks Justin

More people means more people to tax. Retail tax, corporate income tax, personal tax, property tax, land transfer tax – more immigrants equals more revenue. And governments LOVE tax revenue.

More people also means more power. Politicians love power even more than they love money. Will new Canadians vote for the party to whom they owe their citizenship? I’m sure the Liberals hope so.

Hard Things are Hard, Unless You are a Politician Talking Immigration

Capitalists, as in business owners, are often on the right of the political spectrum. You would presume that this means they are against immigration because that’s what the right spews in soundbites. But this could not be further from the truth. For it is the predominantly conservative business owners who are facing the brunt of a population that is aging and whose growth prospects are shrinking.

Business leaders require exactly the kind of labour that mass immigration can provide. When short on employees, businesses can draw from this pool of new immigrants to fill posts they can’t fill otherwise. See Tim Horton’s, GM, and your local restaurants for examples. And when times get a little worse and there are fewer jobs to go around, well the cheap labour precedent set by new immigrants puts downward price pressure on wages. Capitalists love cheap labour.

If you were a real socialist you might argue that the Federal government’s pro-business take on immigration shifts more economic benefit into the hands of the business class at the expense of the working class. How so? Unchecked immigration gives businesses access to cheap labour while the social infrastructure and housing markets are worse and more expensive for that same workforce. Workers pay more, businesses pay less. But I won’t say that, comrade.

Poilievre To the Rescue of Our Housing Market? Uh, No.

In August of 2023, holding a press conference with reporters, Conservative leader Pierre Poilievre discussed immigration:

Poilievre slams the Liberal target as driven by Trudeau’s “ideology,” but he did not answer repeated questions about whether he would consider reducing the number.

He said that a Conservative government would base its immigration policy on the needs of private-sector employers…
Reference: https://www.ctvnews.ca/politics/poilievre-says-canada-s-immigration-system-is-broken-sidesteps-target-cut-questions-1.6502699

More recently, on January 12, 2024, and seemingly in response to public outcry, Poilievre changed his tune. The move from hinging immigration to business needs to tying it to housing starts. Whew. That was quick. But you’ll also note that: (1) there’s no meat on that bone in terms of real commitment and (2) Poilievre changes his mind to suit the political climate which makes him a politician and not a leader.
https://financialpost.com/real-estate/pierre-poilievre-pledges-tie-immigration-levels-homebuilding.

As is politically expedient, Poilievre and Trudeau both keep it vague and loosely commit to anything with broad talking points versus actual plans. Keep this front of mind all you political animals. Both major parties in Canada have refused to alleviate our housing crisis with a sensible plan to limit immigration.

So, to oversimplify things you could say that the political right wants immigration for the access to cheap and plentiful labour and the left wants immigration for macroeconomic and political reasons including pandering to their left-leaning supporters who publicly embrace any strategy that seems in contradiction to the right’s.

Why is Housing So Expensive in Ontario, Canada and Why Can’t I Find a Doctor?

All Canadian politicians want significant immigration but the real question we should all be asking is “how do we do that while not making home ownership or commuting or finding a doctor or going to an ER impossible?” As this article was written, on a Sunday winter afternoon in early 2024, wait times at Sunnybrook Hospital’s ER are 6 hours and 49 minutes. This is not okay. Anyone with a brain could tell you that adding more humanity to the problem without more hospital funding will result in wait times longer than the current seven hours.
Reference: https://sunnybrook.ca/content/?page=ic-emergency-ed-wait-times

And here it is: unchecked immigration is destroying the Canada that I love by tearing the fabric of our social safety net through the sheer volume of humans that we throw at it. It is a reprehensible assault on all Canadians, new and old. Of course there are many home price pressures impacting affordability including high mortgage interest rates. But the root of high house prices in Canada is the most basic economic principle of supply and demand.

Plenty More to Read About Buying a Home Here >>

The Charter of Rights and Freedoms is Driving Up Ontario Home Prices

Compounding the immigration issue is our strict commitment to our Charter of Rights and Freedoms which declares:
Canadian citizens and permanent residents have the right to live or seek work anywhere in Canada. Governments in Canada can’t discriminate based on what province someone used to live or currently lives in.
Reference: https://www.justice.gc.ca/eng/csj-sjc/rfc-dlc/ccrf-ccdl/rfcp-cdlp.html#s3

This should have a big impact on our immigration policy, but seemingly doesn’t. Even with high cost and average home price in cities like Toronto and Vancouver. We know that in most years, 40-50 percent of all Canadian immigrants settle in Ontario. Fully three times the number of immigrants come to Ontario versus the second and third most popular destinations of choice, B.C. and Quebec. And typically about 70% of those immigrants coming to Ontario settle in the city of Toronto.
Reference: https://www150.statcan.gc.ca/n1/daily-quotidien/231219/dq231219c-eng.htm

According to the Charter, the government cannot demand that immigrants settle in specific development zones. Or maybe areas that are short on labour or that have a glut of housing. The right to mobility plus the proclivity for immigrants to come straight to the GTA puts dramatic pressure on Toronto. The healthcare, roads, infrastructure, and social assistance programs, and oh yeah, HOUSING in Toronto all suffer.

How Do Federal Politicians Ignore This Data?

Knowing that Toronto and the GTA and Ontario are the likely destination of most new immigrants, it is amateur hour to not recognize the pressure that hundreds of thousands of new home hunters put on the cost of housing in the region.

This diatribe provides no answers, but points out some of the facts that the racist guy on the subway misses. Limiting immigration is not racist, it is sensible in the context of the daily lives of all Canadians. And especially Torontonians. I doubt that anyone would care half as much about immigration if more roads, hospitals, and housing were on offer. But they’re not. And that’s the practical, non-political, non-xenophobic problem with all this immigration.

House Prices in Canada and Ontario and Toronto are Unduly Pressured By Federal Immigration Policies

Toronto’s ultra-competitive housing market is outrageously under-supplied and thus expensive. The entire Canadian real estate market demand for housing makes it all but impossible for anyone to buy a home. Why is Housing So Expensive in Ontario? Immigration is driving real estate prices higher. Foreign investment in Canadian Real Estate is often cited as “the problem.” But in cities like Toronto, the pressure from immigration versus the lack of housing supply is a much bigger issue. And now you know why immigration isn’t helping.