Smaller cities, such as Kitchener, Ont., need to ensure that they maintain their affordability edge if they want to continue to attract newcomers.Glenn Lowson/The Globe and Mail
Immigrants to Canada have long gravitated to Toronto, Vancouver and Montreal for the job opportunities and cultural vibrancy the three cities offer.
The pandemic-era influx of newcomers was one of the factors that sent housing costs soaring, and worsened traffic congestion, in those burgeoning metropolises.
As of July 1, 2024, the Greater Toronto Area’s population vaulted past the seven million mark following a 3.9 per cent burst in a single year. Vancouver’s population jumped 4.2 per cent to surpass three million and Montreal rose above the 4.5-million mark with a 2.9 per cent gain.
The 2021 census shows more than 53 per cent of new arrivals settled in those three cities, according to Statistics Canada. In 2024, that percentage slipped marginally to 47. That modest change does show that immigrants are more willing to give smaller cities, with lower housing costs, a try.
It’s a trend that governments need to encourage: Canada would benefit from cultivating a handful of mid-sized cities that have the potential to become large cities – easing the strain on Vancouver and Toronto.
Smaller cities need to ensure that they maintain their affordability edge if they want to continue to attract newcomers. To start, local governments can reduce development charges and cut red tape so developers will have greater incentive to build all types of housing, including single-family houses that are increasingly out of reach in big cities such as Toronto.
But immigrants, like everyone else, are also looking for good schools for their kids and higher education for themselves. They need medical care.
Provincial governments can also help by targeting mid-sized cities for funding on health care, transit, infrastructure and schools. The hefty reserve funds some municipal governments have accumulated with contributions from development charges and fees might partly pay for new projects.
Adding in some pre-fabricated homes could reduce construction time, aided by Prime Minister Mark Carney’s pledge to provide $25-billion in financing to that industry.
Canada needs a robust pipeline of newcomers: the aging of the Baby Boom generation together with fewer children being born means immigration will account for all future population growth in this country in the coming decades.
But economic prosperity for the country will depend not only on how many newcomers arrive, but where they choose to establish roots, as a recent report by the C.D. Howe Institute notes.
The Provincial Nominee Program and Atlantic Immigration Program allows provinces and territories to identify immigrants with needed skills and capital and encourage them to settle in places that will prosper.
But since these programs were introduced beginning in the 1990s, populations continue to expand in large cities while regions lag. In some cases, newcomers touch down in “starter cities,” then head to bigger centres.
People can move to new destinations whenever they choose; that liberty is guaranteed in the Charter of Rights and Freedoms.
Regional immigration programs would be much more effective, the report points out, if policies created thriving cities that entice people to stay.
As capable people are attracted to these up-and-coming urban centres – and existing talent is more inclined to stay – innovation flourishes and businesses move in.
The tri-city region of Kitchener-Cambridge-Waterloo in Ontario – the third fastest-growing census metropolitan area in Canada in 2024 - provides an example.
The region west of Toronto is attracting newcomers priced out of the city, including South Asian families who find community centred around the area’s temples, gurdwaras and mosques. Parents save money when their children can live at home while they attend the area’s universities. Those world-renowned institutions have in turn spawned a buzzy tech sector. And improved GO Transit service has made travel to Toronto easier.
Of course, more livable cities attract and retain not just newcomers but also young Canadian-born workers, millennials starting families, and retiring boomers. Urban dwellers seeking affordability would have alternatives to living in a downtown high-rise. Canada needs prosperity beyond two or three mega-cities.