High housing costs are limiting population mobility across Canada, according to the Canada Mortgage and Housing Corporation (CMHC). The federal housing agency has revealed startling statistics indicating many Canadians are finding it prohibitively expensive to buy or rent homes where they seek employment. This trend causes significant repercussions for both individuals and the wider economy.
CMHC’s analysis suggests there’s a pronounced link between housing costs and population movement. Specifically, they note, "a one percent increase of housing prices in a destination city leads to a corresponding one percent decline in the number of people moving there." Such statistics are alarming, especially considering the longer-term trend: the percentage of Canadian households moving each year has plummeted from nearly 17.8 percent to just 10.1 percent by 2020.
Aled ab Iorwerth, deputy chief economist at CMHC, noted on January 30, 2025, "This trend reflects many factors including population aging and technological changes, but housing costs have a role to play as well." This assertion points to the multifaceted nature of mobility issues, with housing costs increasingly presenting barriers for both established workers and newcomers to the workforce. The consequence of this is twofold: first, it restricts the potential skill development of Canadian workers, and secondly, it stifles the economic growth of major urban centers.
When contemplating moves, Canadians are not just considering potential salary increases. According to ab Iorwerth, "When choosing where to live and work, Canadians not only look at the wage increase they might get. They must be realistic about housing costs if they have to move to a new location." For many, the potential benefit of gaining new job opportunities becomes overshadowed by the stark reality of housing expenses. Ab Iorwerth adds, "And they may give up on opportunities... if they can't afford to cover the cost of housing after moving." This indicates how financial barriers can stymie personal growth and, by extension, aggregate productivity for the nation as well.
The issue of high housing costs leads to other unintended economic consequences as well. Employers located in costly housing markets are compelled to offer more substantial salaries to attract skilled workers. This, as highlighted by ab Iorwerth, raises business expenses and can adversely affect overall productivity levels. “The inability to move due to high housing costs is felt by both current workers and those new to the workforce,” he stated.
A closer examination reveals nuances between various cities across the country. CMHC's analysis ranks Toronto as one of the two most expensive cities for housing, alongside Vancouver. Remarkably, Toronto could potentially see its population surge by three percent if it effectively doubled its housing starts over the next ten years. Iorwerth claims, "Population growth can be accommodated if there is sufficient housing supply."
This perspective is bolstered when contrasting cities with lower affordability against those with higher living costs. Calgary and Edmonton, for example, remain relatively more affordable compared to their counterparts, attracting more newcomers amid sustained population growth. Iorwerth attributes their success to more varied housing supplies, stating, "The reason for this is more housing supply keeps house prices under control relative to income, which attracts people.” He asserts "increased housing supply leads to improved accommodation for population growth," which is particularly salient for cities experiencing influxes of new arrivals.
Such observations urge Canadians to reconsider their relationship with housing. The findings from the CMHC raise pressing questions about how policy adjustments could reshape the housing market. If cities take action to improve housing affordability, could they invigorate their economies and attract skilled talent? The imperative to address the current housing crisis cannot be overstated. The stakes are high, and the potential rewards for both individuals and the economy at large are significant.
Without doubt, the findings point to the pressing need for strategic interventions from government and policymakers alike. Fostering increased housing supply appears central to enabling young workers and skilled individuals to move freely across the nation. Addressing the affordability crisis is not just about helping individuals find homes — it is fundamentally tied to economic vitality and the future labor market of Canada.