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In a previous article this month, I discussed the resilience of Canadian housing prices even with elevated interest rates and consumers burdened with debt.

Over the past two decades, Canadian housing costs have significantly outperformed those in the United States.

The issue at hand is quite straightforward – there is a dearth of housing in Canada. With the country witnessing an annual increase of a million in population, there has been a failure on the part of the authorities to construct adequate housing, largely because of severe and inflexible regulations.

Today, CIBC delves further into an issue that I anticipate will soon lead to the downfall of governments across the nation. What are your thoughts on this?

The root of the issue lies in the shortage of individuals employed in the construction occupation, and according to those familiar with the field, the reduced efficiency of existing workers. To compound matters, the demographic of personnel in construction is aging – currently, one-fifth are over 55 years old, in contrast to only 12.5% at the beginning of the previous century.

Trudeau has suggested that increasing immigration could help address the lack of construction workers. However, Canada’s immigration process is biased towards individuals with professional jobs, leaving only a small and declining percentage (2.0%) of new immigrants working in construction.

When you consider all the factors, it becomes clear that there is a housing issue that could persist for years and be difficult to resolve. Even more concerning is the Bank of Canada’s determination to burden homeowners with mortgages to obscure the problem of limited supply.

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