Last year, we wrote about Canada’s immigration announcement in which the federal government expressed plans to bring in over 1.2 million new immigrants over the next three years. We are now more than four months into 2021 and Canada has welcomed 70,000 new permanent residents so far this year, according to official numbers provided to Reuters. Though these numbers are considered to be low, the expectation is that immigration levels will have a chance to bounce back in the wake of the COVID-19 pandemic.

Below, we discuss where new immigrants are expected to settle in Canada in 2021 and in the years to come and the impact immigration will have on the Canadian economy and housing.

 

Immigration into Canada in 2021: Key takeaways

  • Though COVID-19 has stalled immigration, Canada welcomed 26,600 new permanent residents in January 2021. Since that time, 27,000 temporary workers were invited to apply for permanent residency in February and 20,000 health workers, 40,000 international students, and 30,000 “essential” workers were invited to apply for residency in April.
  • The top province for immigrants has historically been Ontario, with 82,550 immigrants choosing to settle down in Ontario in 2020, accounting for 44.9 percent of total immigrants admitted to Canada in 2020.
  • Within Ontario, Toronto has historically been the destination for new Canadians, with 118,000 new immigrants settling in the city in 2019, accounting for 35 percent of the total number of immigrants admitted into the country that year.
  • But recent research has indicated that immigrants are shifting away from major metropolitan centres, such as Toronto, in favour of small- to mid-sized cities, with the number of immigrants settling in smaller urban centres increasing by 45 percent between 2013 and 2019. This could have something to do with increased liveability in these smaller cities, as well as targeted immigration initiatives, which encourage newcomers to settle in places besides major metropolitan centres.
  • As the Canadian economy recovers from COVID-19, immigration will aid in population growth and will help to round out the workforce. As it has historically, immigration is also expected to contribute to spending and demand within real estate markets across the country, which will put upward pressure on real estate values and deepen seller’s market conditions.

 

Immigration into Canada during COVID-19

In March last year, the federal government of Canada announced goals to welcome 341,000 immigrants in 2020, 351,000 in 2021, and 361,000 immigrants in 2022. But since that announcement, it’s become clear that the ongoing COVID-19 pandemic has stalled immigration into Canada. In 2020, Canada only added 184,370 new residents to the permanent population, which is the fewest number since 1998. 

Though 2020’s immigration numbers fell short of the 341,000 target, the government of Canada is still making moves to supplement the pandemic shortfall. In spite of travel restrictions, visa offices closures, and stalled immigration applications Canada welcomed 26,600 new permanent residents in January 2021. And though most of those persons were already residing in the country, January’s numbers were ten percent higher this year compared to January last year. 

Additionally, in February 2021, the Canadian government invited more than 27,000 temporary workers to apply for permanent residency. And more recently, per a program announced in April, 20,000 health workers, 40,000 international students, and 30,000 “essential” workers from other sectors have been encouraged to apply for permanent residency in Canada.

More granularly, the Ontario Immigrant Nominee Program (OINP) held a draw this year in April. Through the draw, 528 Express Entry candidates with tech experience were invited to apply for a provincial nomination. Ontario also launched a new Expression of Interest (EOI) system for two of its provincial immigration programsalso in April. The province expects to open the EOI systems for the In-Demand Skills, Masters Graduate, and PhD Graduate streams in the near future.

 

Immigrants have historically settled in Ontario…

Canada is a big place, so where exactly do Canadians tend to settle? According to Y-AXIS, the top province for immigrants has historically been Ontario, with more than 150,000 immigrants choosing to settle down in the province. That’s compared to 50,000 immigrants choosing to settle in British Columbia, 43,000 choosing Alberta, and 40,000 choosing Quebec. Another source, CIC News, cites that Ontario was the province with the most immigrants last year, with 82,550 immigrants choosing to settle down in Ontario in 2020, accounting for 44.9 percent of total immigrants admitted to Canada.

Source: CIC NEWS

According to information from Ontario’s Ministry of Finance, annual immigration in Ontario is projected to rise to 180,400 by 2045–46, in tandem with overall provincial population growth.

 

…but which Ontario cities will attract immigrants in 2021?

In the past, Toronto has been a popular destination for new Canadians. In 2019, Toronto welcomed 118,000 new immigrants, accounting for 35 percent of the total number of immigrants admitted into the country that year. Toronto’s numbers exceeded every other Canadian city by a wide margin.  

Source: Y-AXIS

But according to a recent Ryerson University paper authored by David Campbell, it’s Canada’s small to mid-sized cities that are starting to attract more immigrants from abroad, with the number of immigrants settling in smaller urban centres increasing by 45 percent between 2013 and 2019. That’s compared to an increase of just nine percent for the number of immigrants settling in Canada’s four largest urban centres combined (Toronto, Montréal, Vancouver, and Calgary), between 2013 and 2019. 

And perhaps this has something to do with liveability, with survey after survey revealing that smaller cities can offer competitive liveability to major metropolitan areas. As such, places like Niagara-on-the-lake, Sault Ste. Marie, Belleville, and North Bay are outranking Greater Toronto in terms of affordability, sectors for employment, public infrastructure, and access to nature. 

Finally, targeted immigration pilots will encourage newcomers to settle in certain areas. For example, the federally funded Rural and Northern Immigration Pilot is expected to attract newcomers to Sault Ste. Marie, Sudbury, Timmins, Thunder Bay, and North Bay. Meanwhile, Ontario’s Regional Immigration Pilot, launched in 2020, was created to encourage newcomers to settle in the communities of Chatham-Kent, Cornwall, and Belleville/Quinte West.

 

The economic and housing impact of new Canadians

Immigration is a cornerstone of Canada’s economy. As the Canadian economy recovers from the COVID-19 turmoil, immigration will have a part to play in rounding out the Canadian population and workforce. And though border restrictions are still in place, we’re already seeing foreign money making its way into Canada from places like Hong Kong, indicating that foreign dollars will also contribute to consumer spending once pandemic-induced travel restrictions lift.

Based on historical evidence, it’s also safe to say that immigration will contribute to spending and demand within real estate markets across the country. Historically, immigrants have readily invested in real estate and tend to have higher rates of ownership, on average, compared to their Canadian-born counterparts. They also contribute to demand for short- and long-term rental housing.

As foreign money enters the mix once again, the expectation is that competition for finite housing stock will put upward pressure on real estate values and deepen existing seller’s market conditions, particularly in smaller centres and rural areas, such as Sault Ste. Marie and Sudbury, which have been known to retain their immigrant population especially well.