Canada's temporary resident growth saw a significant drop, declining by 48% in the second quarter of 2024 compared to the previous year, according to a recent report by the Bank of Montreal (BMO). The slowdown comes after a sharp increase in the number of temporary residents in recent years, which included students, foreign workers, and others looking for temporary stays in the country. BMO analysts have called this drop “long overdue,” as the previous pace was seen as unsustainable for Canada’s housing market and infrastructure.
One of the major reasons for the decline is stricter policies aimed at managing the overwhelming demand for housing and services in major cities. Temporary residents have been adding to the growing strain on Canada’s rental markets, particularly in places like Toronto and Vancouver, where housing affordability has become a significant issue. By curbing the growth of this population, BMO suggests that it could help cool down rising rents and reduce pressure on the already tight housing supply.
BMO’s report indicates that this decline could be a sign of a more balanced approach to immigration and temporary residency, aligning the growth in residents with Canada’s ability to provide adequate housing and support services. The report also highlights that a slower pace of temporary resident growth may be necessary to prevent further negative impacts on Canada's housing market, which has already been strained by high demand and limited supply.
While the reduction in temporary resident numbers might bring some relief to the housing market, critics argue that this could hurt the country’s labor force and economy. Many temporary residents fill crucial jobs in sectors like hospitality, agriculture, and tech. BMO acknowledges these concerns but stresses the importance of balancing immigration growth with infrastructure capacity to avoid long-term consequences.
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