Is the GTA's population in terminal decline?

Just how damaging has the COVID-19 pandemic been to population levels in Toronto, Canada’s new priciest market?

In January, figures from Statistics Canada revealed that the period between July 2020 and 2021 had seen a record number of departures from the Greater Toronto Area (GTA) to other parts of Ontario, with over 64,000 people leaving the city and its surrounding region for pastures new.

With the City of Toronto registering an overall population decline of just over 16,500 during that period – its first annual net loss recorded for 17 years – other parts of Ontario saw rapid price growth as Torontonians spilled out of the city throughout the pandemic.

Kingston – a three-hour drive from Toronto – reportedly witnessed the highest price appreciation across the entire country during 2021’s final quarter, according to real estate giant Royal LePage. Its 38.1% growth, year over year, means that its aggregate house price now sits at over $720,000.

Still, there’s some indication that rumours of Toronto’s demise may have been greatly exaggerated. Despite a new Royal Bank of Canada (RBC) report indicating that the city has surged past Vancouver to claim the crown of Canada’s most expensive market, new census data released by StatCan reveals that its downtown core has actually seen a population increase over the last five years.

That area witnessed 16.1% growth in population between 2016 and 2021, contrasting sharply with a relatively meagre 2.3% increase for the city’s population as a whole during that time.

Indeed, despite the record outflow of residents from the GTA to other parts of Ontario during the pandemic, RBC senior economist Robert Hogue (pictured top) emphasized that people had been leaving the city in significant numbers for years – well before COVID-19 arrived in Canada.

Read next: Toronto surpasses Vancouver as Canada's priciest market

“This exodus right now predates the pandemic,” he told Canadian Mortgage Professional. “When talking about exodus here, it’s [about] people [on] an intra-provincial basis, [and] there’s been a net outflow for many years from the GTA to other parts of Ontario, and also, to some extent, to other parts of Canada.

“That’s been amplified through COVID. But it also pre-existed and predated COVID.”

He said that the pandemic had nevertheless accelerated the trend, with continuing hybrid or home office work options – not to mention a more accessible housing market – likely to have ramped up the appeal of rural areas.

“We do expect that to continue,” he said. “Eventually, post-COVID, some of the workplace flexibility and the ability of people to work from home are likely to maintain a certain outflow of people that otherwise might not have considered moving out of the GTA.

“That would be an enabler, and the difference in affordability levels [between] the GTA and other parts of the province, I think, is going to be the draw. Even though many of those markets have gone up in price considerably over the past year, on a relative basis they’re still more affordable than the GTA.”

Read next: Is the urban exodus about to slow down?

Ontario has been bolstered in recent days by a housing affordability task force recommendation that the province improve access to housing by building 1.5 million homes in a 10-year span, with its members describing more supply as “key” to tackling the housing crisis.

“Building more homes will reduce the competition for our scarce supply of homes and will give Ontarians more housing choices,” the report read. “It will improve housing affordability across the board.”

It also noted that house price increases had far outstripped income growth in the province, having almost tripled over the past decade, compounding a problem that sees Ontario below the G7 average in housing inventory.

Measures recommended by the task force include changes to planning policies and zoning, reduction and streamlining of urban design rules, the removal of red tape, cleaning up the appeal process and aligning efforts between different levels of government to incentivize more housing.

Chair of the task force Jake Lawrence, who also serves as CEO and group head, global banking and markets at Scotiabank, described the report as an ambitious blueprint to ease supply issues in the Ontario housing market.

“Lengthy reviews, bureaucratic red tape, and costly appeals are making it too difficult to build new housing,” he said. “We propose an ambitious and achievable goal to build 1.5 million homes over the next 10 years, and the steps needed to get there.”