Opinion: High housing costs and a stagnant economy are causing a large number of Canadians to "vote with their feet," says economist.
Vernon mayor Vernon Mayor Victor Cumming is a witness to one big migration trend — the large number of young families escaping Metro Vancouver. Meanwhile, many other people are also moving out of B.C. to other provinces — and from Canada to other countries.
PHOTO BY JOSH WINQUIST
Vernon Mayor Victor Cumming is highly aware that a lot of British Columbians are on the move.
Lorraine Complains: Save $120 a year on that sticker? Be careful what you vote for He’s getting to know the young parents who come to his mid-sized Okanagan city from Metro Vancouver to escape extreme housing costs and to stretch their money further while enjoying easy access to outdoor recreation.
They get a much higher quality of life for much less money,” Cumming said, noting many new families show up in the school system when their children are ready to enter Grades 3 and 4.
Last year, 635 people from Metro set up a new home in Vernon, population 69,000.
But the intra-provincial shift away to places like Vernon, Courtenay and Kamloops from B.C.’s biggest cities is just one migration trend. A large number of people are now also moving out of B.C. to other provinces — and from Canada to other countries.
For two decades a confident B.C. has been used to attracting more people than it loses to other provinces. But over the last year more British Columbians — about 8,000 — have left the province for other parts of Canada than have arrived from within it. They’re seemingly doing so to escape a drab economy and the cost of housing.
Meanwhile, at the national level, about 35,600 people have left Canada altogether.
That’s the disturbing counterpoint to Canada’s main narrative, which is that the country is undergoing a population boom because an unprecedented number of foreign nationals have been invited to the country.
The Liberal government boasts that bringing in a record 1.25 million permanent and temporary residents in one year is the key to prosperity for all. Many Canadian economists, however, believe it’s actually masking stagnation.
For every action there is a reaction. And one of the responses to record population growth, 98 per cent of which is fuelled by international migration, is that “people vote with their feet,” says David Williams, economist for the Business Council of B.C., which represents 250 large-scale businesses.
Canada and B.C., Williams says, risk losing some of their best and brightest people to other places because the standard of living is flat or declining.
Williams believes Ottawa’s immigration policies have become “disconnected from the academic evidence.” Federal politicians act as if having by far the highest migration rate of any advanced nation is a panacea for the country’s economic malaise.
But the reality is that Canada has one of the weakest overall economies in the OECD, a club of 38 mostly rich nations, says Williams.
Canada had the third weakest economy in the OECD in the five years before COVID-19. And it has had the fifth weakest economy since the pandemic in terms of growth in GDP per capita, a crucial measure of real incomes that he says “reflects people’s share of the economic pie.”
Worse yet, the OECD projects Canada’s growth in GDP per capita will be the lowest among all its member countries over the next four decades.
“We’re right at the back of the pack,” Williams says.
“You don’t need to be an economist,” he says, to recognize living standards are going sideways or down for a lot of people.
“Canadians have figured out for themselves that the economy isn’t performing very well. They’ve seen that in their personal lives, when they try to buy groceries, pay their rent, pay their mortgage, pay all their taxes and queue up for health care.”
Williams suggests politicians’ persistent failure to deliver rising real incomes “risks losing thousands of aspirational, skilled Canadians to, for example, the U.S. where productivity is higher, market wages are higher and income taxes are lower.”
As the mayor of Vernon has witnessed, while new permanent and temporary migrants to Canada concentrate on gateway cities like Toronto, Montreal and Vancouver, contributing to higher residential land costs, many big-city Canadians are saying goodbye to family members and friends. They’re migrating to smaller, less congested places where the cost of housing is more affordable.
Since 2017, roughly 10,000 to 12,000 more British Columbians a year have been leaving Greater Vancouver than moving into it. They’re setting up homes on Vancouver Island and the Thompson-Okanagan.
Statistics Canada data shows Courtenay, for instance, took in 618 new residents from Metro in one recent year, far more than the other way around. And Kamloops embraced 1,046 newcomers from Metro, most of them under age 65.
Williams spells out how the high-migration policy of Ottawa, which is without parallel around the world, is a major factor behind why so many are moving out of Canada, its biggest provinces (such as Ontario and B.C.) and its largest metropolises.
Prime Minister Justin Trudeau, he said, is now bringing in enough new people to create a new province of B.C. every 4 1/2 years. And the Liberals are acting as if their plan to mushroom the population by 3.2 per cent a year — which is six times the average intake since the Second World War — is an “unambiguous good,” Williams said.
“But Ottawa’s immigration policy has really become disconnected from the academic evidence. There seems to be a view in the federal government that you can pull the immigration policy lever and an embarrassment of riches comes your way. That it’s a panacea for all our economic woes. And it’s simply not.”
Virtually every scholarly study shows that immigration levels “have a neutral or very small overall impact on a standard of living,” Williams says, as they don’t materially alter productivity, real wages, employment rates or fertility trends. He cites a host of labour-market economists who have said as much, including Mikal Skuterud and Matthew Doyle of Ontario’s University of Waterloo; Christopher Worswick and Frances Woolley of Carleton in Ontario; and David Green and Craig Riddell of the University of B.C.
Williams believes Canada’s federal politicians are motivated to bring in a record number of immigrants, foreign students and other guest workers to “juice” GDP growth. And all those bodies do provide more consumers of goods, services and housing. But there’s no evidence that faster population growth raises GDP per capita, which is the best measure of living standards.
In other words, the highest migration rate in the Western world isn’t necessarily helping most Canadian families get ahead. So more than a few are pulling up stakes to find somewhere more attractive to prosper.