The Truth Behind the Canada’s Exodus: Leaving the Most Expensive Provinces

Surging home prices, rising interest rates, and persistent inflation have presented significant challenges for prospective homebuyers in Ontario's most expensive housing markets. However, as the pandemic restrictions eased and remote work arrangements became more prevalent, many Ontario residents found themselves contemplating a change of scenery. This shift in mindset, coupled with interprovincial migration, has had a profound impact on communities across Canada.

The Truth Behind the Canada’s Exodus: Leaving the Most Expensive Provinces - Eye-opening insights revealed!

Statistics Canada data reveals that interprovincial migration volumes experienced a decline in 2020, the initial year of the COVID-19 pandemic. However, it started to accelerate in 2021 and exploded in the second quarter of the year. Substantial numbers of migrants from British Columbia and Ontario flocked to Alberta during this period. Additionally, Nova Scotia and New Brunswick, located in the Maritime provinces, witnessed a steady stream of interprovincial migrants, particularly from Ontario.

The influx of out-of-province buyers continues to fuel sales activity in Calgary, one of Canada's housing markets that has demonstrated a remarkable resilience amidst the ongoing correction tied to higher interest rates. Vancouver families who were previously renting basement apartments now find themselves able to afford single detached homes in Alberta at $650,000, while earning similar or better salaries than they did in British Columbia.

When comparing home prices to housing income, markets like Atlantic Canada and Alberta boast a ratio of approximately 10. In contrast, Ontario and British Columbia recorded a figure more than double that. While British Columbia has historically attracted migrating Canadians heading west, the province recently experienced a negative 12-month total of net interprovincial migrants for the first time in a decade.

Apart from Ontario, Manitoba, Saskatchewan, and Quebec have also witnessed a significant number of residents leaving their provinces in the past year. However, the outflows from Quebec have become more manageable due to its relative housing affordability. Similar trends are expected to unfold in Manitoba and Saskatchewan, where the majority of migrants are now heading towards Alberta.

Various changes resulting from the pandemic have also contributed to Alberta and Atlantic Canada's gains. The availability of telework opportunities has enticed young individuals to relocate to more affordable, remote communities in the Prairies and on the East Coast, eliminating the need to reside in major cities and commute to the office. The ability to attract youth, who are often entrepreneurial and financially savvy, serves as a long-term catalyst for the economies of Alberta and other provinces with lower living costs. Conversely, the inability to retain youth due to the unaffordability of provincial housing markets raises concerns for Ontario and British Columbia.

With Canada's aging population and declining birth rate, the economy is becoming increasingly reliant on immigration for growth. As a result, it is imperative for provinces not to miss out on attracting and retaining young individuals. Over the past decade, a "mass migration" of younger Ontarians to the East Coast has reversed the Maritimes' growing median age trend. Moreover, these waves of migrants have played a crucial role in diversifying industries on the East Coast, particularly in the knowledge economy post-COVID.

Despite facing severe affordability challenges, Toronto and Vancouver have the advantage of being immigration hubs. In the short term, the influx of newcomers to Canada offsets most losses from emigrating youth. However, the ongoing affordability challenges in metropolitan markets raise concerns that migrants from outside Canada's borders may increasingly choose to settle outside of major cities.

Looking ahead, the lack of housing supply poses a familiar problem across the country. In Alberta, housing starts have experienced a more significant downturn compared to other provinces, indicating the possibility of a supply crunch in the future. The pressing need to rapidly increase housing supply remains a national concern as long as these hotspots persist and Canadians continue to uproot themselves in search of affordable living.

In conclusion, interprovincial migration has reshaped communities in Canada, with housing affordability serving as a central driving force. Alberta has seen an influx of migrants from British Columbia and Ontario, while Nova Scotia and New Brunswick have experienced steady streams of interprovincial migrants. The ability to accommodate remote work arrangements has attracted young individuals to more affordable provinces, bolstering their economies. However, the lack of housing supply remains a pressing issue that warrants attention across the nation.