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Episode 03: Is Canada Facing a Perfect Storm of Rising Unemployment and a Housing Meltdown?
Manage episode 440715034 series 3598209
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In this episode, we dive into the big issues facing Canada’s economy and housing market: from temporary foreign workers (TFWs) and rising unemployment rates to the sharp decline in new condo developments. We explore the long-term impact on Canada’s workforce and housing, and how government policies are shaping the future of employment and real estate.
Topics Covered:
- Canada Cutting Back on Temporary Foreign Workers (TFWs):
- Canada is reducing the number of low-wage TFWs to address high unemployment rates among immigrants and young people.
- Sectors with 6%+ unemployment won’t be allowed to hire TFWs, except for food security, construction, and healthcare sectors.
- TFW program changes include limiting TFWs to 1-year contracts and capping employers from hiring more than 10% of their workforce through the program.
- Unemployment Statistics:
- Newcomer unemployment at 11.6% and youth unemployment (ages 15-24) at 13.5%—the highest in a decade.
- A growing crisis highlighted by the UN calling Canada’s TFW program "a breeding ground for modern-day slavery."
- The Strain on Housing:
- Not enough housing for the influx of TFWs.
- Canada holds the highest number of TFWs in the G7, with job fairs overwhelmed by applicants struggling to find work.
- New Developments Dropping Off a Cliff:
- In July 2024, only 266 pre-construction condos were sold compared to a 10-year average of 2000 units.
- Appraisals are falling short, while development fees are rising. Burnaby, for example, increased development fees to $50K per unit after receiving $80M from the federal government for the Housing Accelerator Fund.
- The Future of Condo Development:
- Developers may shift to subscription-based models, building rental units instead of condos for sale to capitalize on easy, long-term revenue gains.
Key Takeaways:
- Canada's TFW program is being scaled back to address unemployment, but the housing shortage for these workers remains a serious issue.
- New condo developments have hit record lows, with developers potentially shifting towards rental projects.
- Rising development fees and appraisals coming in short are further hindering real estate growth.
Resources Mentioned:
- Arpan Khanna's video on the immigration crisis (MP for Conservatives in Oxford, ON)
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