October 15, 2025 | The Compound Cost of Policy Errors Around Immigration and Housing

A couple of must-read articles from the Globe this week examine Canada’s policy errors around immigration and housing–two tangential, interconnected themes with far-reaching impacts for our economy, present and future.

See, How Canada got immigration right for so long–and then got it very, very wrong:

Canada conducted a decade-long experiment. The experiment’s principal investigator was the Trudeau government, assisted and enabled by the provinces, the business community and much of the higher-education sector. They were opposed by essentially nobody.

The hypothesis was that Canada, already one of the developed world’s highest-immigration countries, could jump-start its slow-growth economy through higher immigration and lower standards.

The experiment was not a success.

Between 2015 and 2024, Canada was arguably the rich world’s poorest economic performer. Real GDP per capita – economic growth per person, less inflation – grew by 2 per cent, according to the OECD. Not 2 per cent per year. Two per cent, in total, over a decade. During the same period, U.S. GDP per capita was up almost 20 per cent.

By 2025, real GDP per capita was no higher than it had been in 2019.

It turned out that supercharged population growth via record-high immigration was not a panacea for the country’s economic challenges. It had, if anything, made the challenges more challenging.

Then see, Ten Charts that explain Canada’s messy and complicated Housing Markets:

Back in early 2022, housing markets across Canada – no stranger to bouts of euphoria – were riding a rally with little precedent.

The representative national home price hit $837,400 in February that year, an increase of 58 per cent – or more than $300,000 – in just three years, according to the Canadian Real Estate Association.

With hindsight, it was the peak of the madness. The Bank of Canada started to jack up interest rates to tame inflation, which sent the real estate industry into a tailspin. The typical home price has now slipped below $690,000, and the declines have been precipitous in the most speculative corners of British Columbia and Ontario.

Lower prices and lower interest rates have started to improve housing affordability, but deeper declines for both are yet needed.

…Even with prices on the decline, homes are still prohibitively expensive for many buyers. Various metrics show that affordability has improved, but not by much. The Bank of Canada is poised to cut interest rates a couple more times in the coming months, but economists aren’t expecting a return to near-zero levels.

All to say, Canada’s housing crisis isn’t going anywhere, despite taking a back seat to trade concerns of late.

Danielle Park October 15th, 2025

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