Figures from the national statistics agency indicate a gap in counting the number of NPRs, economist says
The officially reported number of non-permanent residents (NPR) in Canada could be significantly underestimated, according to a new report by CIBC Capital Markets.
Benjamin Tal of CIBC said that this discrepancy arises because Statistics Canada releases population info in two separate formats: its census and its quarterly/annual estimates of population growth.
“Zooming in on the estimate of the NPR count in those two sources reveals a big gap,” Tal said. “The 2021 census suggests that there were just under 925,000 NPRs in Canada, while the quarterly estimate suggested the count was 1.17 million.”
Tal said that the national statistics agency has admitted the existence of such gaps, with the 2011 census in particular having undercounted the number of NPRs by more than 40%.
“Back then, the absolute number of NPRs was relatively small, so the undercounting did not have profound implications on population growth and housing market demand planning, unlike today’s situation,” Tal said.
“While the gap in counting has apparently narrowed since 2011 to just over 20%, the exponential increase in the absolute number of NPRs in recent years suggests that in absolute terms the gap between the two measures in 2021 rose to close to 250,000.”
While the government's target of welcoming 500,000 newcomers remains unchanged, #Immigration Minister Marc Miller acknowledges the importance of understanding the impact of population growth on the #housingsupply. https://t.co/oAX4Yi63Na#mortgageindustry #housingmarket
— Canadian Mortgage Professional Magazine (@CMPmagazine) August 24, 2023
Policy challenges might prevail for the foreseeable future
The danger in these gaps is that they might make any measures insufficient to address the housing market impact of non-permanent residents and new arrivals alike.
“Provinces and municipalities all over the country rely heavily on Statistics Canada and CMHC’s population and household formation forecasts to allocate resources and establish zoning and budgets for new housing in order to accommodate the projected increase in demand,” Tal said.
“What if 10 years ago we had known that Canada’s population would reach 40.2 million in 2023? We probably would have been better prepared, and the size of the housing shortage would have been smaller. But we didn’t know.”
Tal said that playing catch-up to this surge will be crucial, even if it might appear to be a tall order.
“Even if by a miracle we start doing all the right things to increase housing supply, it will take years for that supply to come to the market,” Tal said. “Meanwhile, demand is rising fast.
“The official number of NPRs that is widely quoted and used for planning purposes undercounts the actual number of NPRs residing in Canada by close to one million. That means that any policy aimed at capping the number of NPRs is more urgent than perceived.”
