Brandon Donnelly
Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly.
Brandon Donnelly
Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly.
Population growth -- so, immigration -- is a crucial demand driver for the real estate industry, and for the growth of the overall Canadian economy. Last year, Canadian immigration averaged about 28,400 people per month, according to a recent equity research report (on the apartment sector) by TD Bank. The total number for 2019 was 341,175 people.
Not surprisingly, this number fell off in March of this year with the closing of our borders. In March, immigration declined to 18,560 per month and bottomed out in April with only 4,135 immigrants being admitted to the country. This has no doubt been a factor in some of the rent softening that we have seen in the multi-family space.

While it's unlikely that Canada will meet its 2020 target of 320,000 to 370,000 new immigrants, it's important to note that we have seen a fairly swift recovery (see above). In June of this year, the number rebounded to 19,175 new immigrants. And I'm certain that most of this cohort still went straight toward our biggest cities.
It's also important to keep in mind that Canada's three-year goal (2020-2022) remains 1 million new immigrants. TD is of the opinion that this target is still attainable, as this "short-term immigration headwind" is likely to flip into a tailwind once our borders become more porous and we get to the other side of this pandemic.
Looking back on this post from earlier in the week, I think it's pretty safe to say that you could bucket this immigration blip into (1) short-term dislocation. It is not a (3) long-term structural change. Canada remains one of the greatest countries in the world. We will continue to attract smart and ambitious people from all around the world, and most will want to settle in our urban centers.
All of this, of course, will be good for the real estate industry and will be vital to the strength of the Canadian economy as a whole.
Chart: TD Securities
This has become a frequently reported topic, but here's a recent article from Wired talking about tech workers living out the American Dream -- in Canada. The story is pretty simple. Immigrants are smart and work hard. Canada has a system in place that privileges newcomers who are young and smart. And this has become a boon for our largest city and for the country. Here are two excerpts from the article:
But there's a new global winner: Canada, and particularly Toronto. Since 2013, the tech scene there has grown faster than in any other North American city. In 2017, Toronto added more tech jobs than Seattle, the San Francisco Bay Area, and Washington, DC, combined; in 2018 (the most recent year for which numbers are available), the city was second only to the Bay Area in new tech jobs. Toronto is so crammed with immigrants that nearly 50 percent of all residents were born outside the country.
Canada's immigration policy is hardly warm and fuzzy. On the contrary, it's icily calculating. The government loves educated, elite newcomers, because they help propel the economy, says immigration lawyer Peter Rekai, but it wants them young, so they won't drain the public health care system. Their parents are much less welcome.
In the first quarter of this year, international migration accounted for 82.3% of Canada's population growth. And at the beginning of this year, Ottawa was planning for up to 370,000 new permanent residents. It is highly unlikely that we hit that number given our current health crisis, but I have no doubts in my mind that we will hit it in the very near term. And when we do, it will be a good thing for Toronto.

Bloomberg recently reported that Canada admitted 321,065 permanent residents last year. This is up 12% from 2017, where the country admitted 286,479. Last year was also the largest cohort since 1913 (the year before World War I), where the country admitted just over 400,000 people.
Here is a chart from Bloomberg (it is interactive if you click through):

Of course, Canada was a much smaller country back in 1913 (about 7.6 million people), and so on a percentage basis we are much lower than where we were at the beginning of the 20th century. We'd have to admit close to 2 million permanent residents a year to get to a similar rate.
And that is not what is in the books. Here are the projected admissions for 2019 to 2021. All of the below stats are from the 2018 Annual Report to Parliament on Immigration.

I couldn't find a geographic breakdown for last year, but in 2017, about 40% of admitted permanent residents (or 111,925 total) ended up in Ontario and about 72% ended up in Ontario, Quebec, and Alberta (the top 3 provinces for this year). If we add in BC, it brings this figure up to 86%.
Here are also the top 10 countries of origin:

If you'd like to download a PDF of the full report, you can do that here.
Population growth -- so, immigration -- is a crucial demand driver for the real estate industry, and for the growth of the overall Canadian economy. Last year, Canadian immigration averaged about 28,400 people per month, according to a recent equity research report (on the apartment sector) by TD Bank. The total number for 2019 was 341,175 people.
Not surprisingly, this number fell off in March of this year with the closing of our borders. In March, immigration declined to 18,560 per month and bottomed out in April with only 4,135 immigrants being admitted to the country. This has no doubt been a factor in some of the rent softening that we have seen in the multi-family space.

While it's unlikely that Canada will meet its 2020 target of 320,000 to 370,000 new immigrants, it's important to note that we have seen a fairly swift recovery (see above). In June of this year, the number rebounded to 19,175 new immigrants. And I'm certain that most of this cohort still went straight toward our biggest cities.
It's also important to keep in mind that Canada's three-year goal (2020-2022) remains 1 million new immigrants. TD is of the opinion that this target is still attainable, as this "short-term immigration headwind" is likely to flip into a tailwind once our borders become more porous and we get to the other side of this pandemic.
Looking back on this post from earlier in the week, I think it's pretty safe to say that you could bucket this immigration blip into (1) short-term dislocation. It is not a (3) long-term structural change. Canada remains one of the greatest countries in the world. We will continue to attract smart and ambitious people from all around the world, and most will want to settle in our urban centers.
All of this, of course, will be good for the real estate industry and will be vital to the strength of the Canadian economy as a whole.
Chart: TD Securities
This has become a frequently reported topic, but here's a recent article from Wired talking about tech workers living out the American Dream -- in Canada. The story is pretty simple. Immigrants are smart and work hard. Canada has a system in place that privileges newcomers who are young and smart. And this has become a boon for our largest city and for the country. Here are two excerpts from the article:
But there's a new global winner: Canada, and particularly Toronto. Since 2013, the tech scene there has grown faster than in any other North American city. In 2017, Toronto added more tech jobs than Seattle, the San Francisco Bay Area, and Washington, DC, combined; in 2018 (the most recent year for which numbers are available), the city was second only to the Bay Area in new tech jobs. Toronto is so crammed with immigrants that nearly 50 percent of all residents were born outside the country.
Canada's immigration policy is hardly warm and fuzzy. On the contrary, it's icily calculating. The government loves educated, elite newcomers, because they help propel the economy, says immigration lawyer Peter Rekai, but it wants them young, so they won't drain the public health care system. Their parents are much less welcome.
In the first quarter of this year, international migration accounted for 82.3% of Canada's population growth. And at the beginning of this year, Ottawa was planning for up to 370,000 new permanent residents. It is highly unlikely that we hit that number given our current health crisis, but I have no doubts in my mind that we will hit it in the very near term. And when we do, it will be a good thing for Toronto.

Bloomberg recently reported that Canada admitted 321,065 permanent residents last year. This is up 12% from 2017, where the country admitted 286,479. Last year was also the largest cohort since 1913 (the year before World War I), where the country admitted just over 400,000 people.
Here is a chart from Bloomberg (it is interactive if you click through):

Of course, Canada was a much smaller country back in 1913 (about 7.6 million people), and so on a percentage basis we are much lower than where we were at the beginning of the 20th century. We'd have to admit close to 2 million permanent residents a year to get to a similar rate.
And that is not what is in the books. Here are the projected admissions for 2019 to 2021. All of the below stats are from the 2018 Annual Report to Parliament on Immigration.

I couldn't find a geographic breakdown for last year, but in 2017, about 40% of admitted permanent residents (or 111,925 total) ended up in Ontario and about 72% ended up in Ontario, Quebec, and Alberta (the top 3 provinces for this year). If we add in BC, it brings this figure up to 86%.
Here are also the top 10 countries of origin:

If you'd like to download a PDF of the full report, you can do that here.
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