Major cities losing residents to surrounding CMAs: StatCan

Population growth in Canada’s urban centres decelerated between July 2019 and July 2020, according to Statistics Canada—a trend no doubt influenced by the sprawling search for affordable detached homes.

“The desire to live outside the largest urban centres was also reflected in the rapidly increasing housing costs in neighbouring real estate markets, a trend that has continued in spite of the pandemic,” said the recent StatCan report.

In Census metropolitan areas, population growth declined to 1.3% from 1.7% between July 2018 and July 2019. Toronto, Montreal and Vancouver, Canada’s three largest cities, saw positive population growth because of immigration, but they had more people moving to other regions of their provinces than moving in, with Toronto losing 50,375 people, followed by Montreal at 24,880.

“In Toronto, the net loss was mainly driven by people moving to surrounding CMAs,” said the report. “For example, the population growth in Oshawa (+2.1%)—which posted the fastest growth—was partly due to migration flows from the neighbouring CMA of Toronto.

“High population growth rates in municipalities close to the Montreal CMA, like Farnham (+5.2%) and Saint Hyppolyte (+4.1%), were also partly due to migratory flows coming from the Montreal CMA.”

However, the slowed population growth might not be as noticeable if it weren’t for the COVID-19 pandemic essentially stymieing demand from key demographical groups who comprise a substantial chunk of urban condominium apartment renters. In tandem with exorbitant housing prices in Canada’s major cities—the exodus to suburbs and exurbs began long before the coronavirus crisis, but historically low interest rates have helped homebuyers previously shafted by B-20 resume their pursuit of detached housing—the CMAs’ declining growth might look more dramatic than it really is.

“In the cities themselves, we’re seeing really soft rental markets. Rental vacancy rates are rising and rents are falling,” Phil Soper, president and CEO of Royal LePage, told CREW. “One of the mistakes people make is assuming everybody is abandoning the cities. In fact, a major contributor, perhaps the major contributor, is missing demand altogether. It’s missing demand that comes from foreign students, domestic students and new Canadians.”

Quoting StatCan and Public Safety Canada figures, Soper noted that there were 828,356 international students in Canada in 2019, and it isn’t a stretch to presume most of them study in major cities, each of which have multiple post-secondary institutions. Additionally, pandemic-induced shutdowns affect renters more than homeowners, and annual immigration quotas, which were increased late last year, have been shelved for the time being.

“Our universities are suffering because foreign students are major contributors to them, because they pay more than domestic students. Domestic students are also missing because a lot of them are taking classes online,” said Soper, adding the latter are simply moving back into their parents’ homes until they have to physically return to classes. “The federal government paved the way for students to return to Canada, and a lot of them came back in January, but most won’t be back until September when the school year starts.”