By Wendell Cox

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Opinion: Want to help solve Canada's housing crisis? Move Back to video

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Canadians may be solving the housing crisis on their own by moving away from more expensive areas to places where housing is much more affordable. This trend is clear in the latest internal migration data from Statistics Canada.

“Net internal migration” refers to people who live in Canada moving to other parts of Canada. Along with natural increase (births minus deaths) and international migration, it determines local population changes.

The StatCan data divide the nation into 167 areas and three groupings: census metropolitan areas (CMAs), with populations of 100,000 and up; census agglomerations (CAs), with a core population of at least 10,000; and “largely rural areas.” Between 2019 and 2023, Canada’s CMAs lost 273,800 net internal migrants (compared to just 1,000 in 2014-18). In a reversal of the historical pattern, people are starting to leave the country’s largest cities.

Where did they go? Thirty-nine per cent — 108,100 — moved to CAs. The rest went to largely rural areas, which gained 165,700 net internal migrants, representing 61 per cent of CMA losses. In the previous five years these areas had themselves lost 33,700 people.

The “largely rural” areas of Ontario saw the biggest gain, with a net increase of 78,300 — nearly 40 times their inflow in the previous five years. Largely rural areas of Quebec placed second, with a net gain of 76,200, a 10-fold increase in their inflow in the prior half decade. Calgary ranked first among CMAs as a destination at 42,600, followed by Ottawa-Gatineau (36,700) and Oshawa (34,900).

The largest CMA, Toronto, had by far the biggest net loss to internal migration: 402,600 emigrants. Montreal lost 162,700, Vancouver 49,700. Outside these three CMAs, nearly everywhere else posted net gains. People have also started moving to the Maritimes. The Halifax CMA tripled its previous gain. Moncton nearly quadrupled its. Fredericton, Saint John and Charlottetown also gained, though modestly.

Meanwhile, housing affordability in Canada’s largest CMAs has become grim. These cities (and others) follow international planning orthodoxy and seek to increase their population density. They declare war on “urban sprawl” and try to stop urbanization’s expansion. The tools they use, including greenbelts, agricultural reserves, urban growth boundaries and “compact city” strategies, are associated with the worst housing affordability. They skew land prices throughout the market. Demand continues to increase ahead of incomes, but the supply of low-cost suburban land, crucial to controlling costs, is effectively frozen.

In Toronto the ratio of the median house price to median household income has doubled in the two decades since adoption of the Greenbelt. It almost doubled over the same period in Montreal. And in Vancouver house prices tripled relative to incomes since that city’s adoption of urban containment five decades ago.

Some areas to which people have fled also feature urban containment that has hurt affordability. Between 2015 and 2022, prices doubled in the London, Guelph, Brantford and St. Catharines CMAs. B.C.’s Fraser Valley and Vancouver Island have seen similar increases. People who moved to these areas are ahead financially, but rapidly rising house prices are shutting down opportunities for others.

There are many proposals to restore housing affordability, but none tackle the urban containment policies associated with the price increases. Without addressing that, there may be no way back to materially better housing affordability in Toronto, Vancouver and Montreal. Such markets have become unsustainable for most new entrants, who simply cannot afford to live there.

Housing is not a standardized commodity. Household preferences vary. Some people want ground-oriented housing (whether detached or townhouses), others high-rise condos. According to Statistics Canada, Canadians have favoured lower densities for decades, a trend that continued through the 2021 Census.

With governments around the world failing to maintain stable, affordable housing markets, it’s not surprising people are voting with their feet. Until fundamental reforms can be implemented in the most expensive markets, those seeking a better quality of life will have no choice but to leave.

Wendell Cox, senior fellow at the Frontier Centre for Public Policy, is author of “Demographia International Housing Affordability.”

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