The record 1.27 million immigrants that arrived last year have to live somewhere.
By Wolf Richter for WOLF STREET.
Canada’s population jumped by 1.27 million people in 2023, to 40.77 million by January 1, an increase of 3.2% from a year ago, the highest year-over-year growth rate since 1957 (3.3%), Statistics Canada said today in its report on the exploding growth of Canada’s population, driven by a huge wave of immigrants; 98% of the population growth came from immigration.
And this sudden population growth has been putting enormous strains on the rental housing market, where rents have spiked, and continue to spike. And it has had a number of other effects that pressure Canadians in their daily lives.
“Since the end of 2020, demographic trends in Canada have shifted significantly. The fertility rate reached a record low of 1.33 children per woman in 2022. Millennials now outnumber baby boomers in Canada, and the labour market has changed, with some sectors experiencing shortages. Many permanent and temporary immigrants came to Canada, including many workers and international students,” StatCan said in the introduction of its press release.
The government of Canada has now responded to the outcry over its immigration policies and the effects they produce, including the spiking rents, by proffering to dial back the number of temporary immigrants allowed into the country.
The year-over-year increases in the past two quarters, at around 3.2%, and even the growth rates in 2022, were complete outliers that no one in the economy was prepared for, and rental housing doesn’t get built from one day to the next suddenly like this.
Of the 1.27 million immigrants added to the population in 2023, 471,800 were permanent immigrants and 804,900 were non-permanent residents (NPRs).
StatCan estimated that 2.66 million NPRs were living in Canada on January 1, 2024, including 2.33 million permit holders and their family members, and 299,000 asylum claimants with or without work or study permits.
And they all have to live somewhere. And this huge and sudden surge in demand for rental housing has caused rents to spike in a historic manner.
Rents spike.
The CPI for rent in February spiked by 10.0% annualized from January. The six-month annualized rent CPI, which irons out the large month-to-month variability, spiked by 10.3%, the worst since 1983.
The rent CPI is a measure of what tenants actually pay in rents, not a measure of asking rents, and includes rents paid by tenants in rent-controlled markets.
The chart below shows the Rent CPI in terms of price level, not percentage change. Compared to a year ago, the rent CPI in February was up 8.2%. Since January 2022, in line with the boom in population growth, the Rent CPI has shot up by 15.8% and has been accelerating sharply in 2023 and so far in 2024, as shown in the chart above:
The Bank of Canada, in discussing its interest-rate-policy decisions and inflation, has been pointing at the surge of immigrants as the source of rent inflation, which has caused services CPI to be stickier and higher than hoped for, even as the homeownership CPI has started to cool a little.
New immigrants largely rent homes when they first arrive, rather than purchase homes, and so home prices have been pressured down by higher mortgage rates that are not compatible with the crazy-high prices in many markets.
Prices of single-family houses have fallen by 15.6% from the peak in February 2022, according to the Home Price Benchmark Index by the Canadian Real Estate Association. In dollar terms, the Benchmark Index for single-family houses has fallen by $145,500 from the peak in February 2022, to $788,800, just above where it had first been in August 2021 (amounts in Canadian dollars).
But there was a wide divergence between the major markets, and between houses and condos in some markets, as we see in our coverage of The Most Splendid Housing Bubbles in Canada:
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Better dwelling
“Canadian Banks To Limit Mortgage Leverage Before Rate Cuts.
Canadian mortgage lenders are preparing for new limits to mortgage lending. Mortgage portfolios will soon be limited to 4.5x borrower income in a quarter. Only a small share will be allowed to exceed the limit, designed to reduce portfolio risk. “
This only refers to lenders’ overall figures, it does NOT refer to individual borrowers.
Yes it’s truth!
But the new rule is one of the many being rolled out to reduce public exposure to private debt. Since the global financial crisis, global regulators have been working together to better quantify risk.
As far as I know, Canadians are the most indebted society in the G7
“And this sudden population growth has been putting enormous strains on the rental housing market, where rents have spiked, and continue to spike. And it has had a number of other effects that pressure Canadians in their daily lives.”
Thank you, Wolf, for making this connection. The same thing but much greater effect is happening here in the US. This correlation will have long-lasting, upward pressures on rent inflation, etc here in the US.
Best regards.
For uninsured mortgages.
Good stuff. Increasing rents, while painful, will not be the worst side effects on ever increasing immigration patterns. Interesting to see it and the general nationalistic tendencies that usually accompany it.
It’s a disease that’s infected the entire Western world
it is self inflicted disease — free money and free promises, together with all culture are same, attract all kind of stooges. Of course wars around the world which displace people does not help.
Correct. Most Westerners did not want this. Most of us are charitable to some levels of mutually beneficial immigration, but importing hordes of illiterate third worlders, solely to suppress wages for the corporate elite, all while providing the statist politicians a permanent voting bloc, was not something any of us ever supported. But it was foisted on us anyway.
Homeland security said at least 1 million new undocumented migrants are using someone else’s SSN.
Good luck if this happens to you. Somebody(s) started using my daughters SSN when she was 11ish. We did not know about it unit she turned 19 and she wanted to get a credit card and her own cell phone. The Cell Phone company would not let her get her own account because somebody already had an account for 7 years with her SSN. They told her to bad and they would not let her open an account and really did not believe her that this was her SSN. They treated her as the one trying to open a fraudulent account. Afterall, the other person had been a good customer for 7 years. LOL
She also found out she had a couple of current loans in different states using her SSN.
Luckily, there were no bad credit events as they were paying the bills but it was hard for my daughter to get her own credit card or cell phone…etc
It took a lot of work fixing these things. Calling credit reporting agencies, the companies that gave out the loans….etc. She gave on the cell phone company in trying to get that fixed. As far as I know, the person is still using her SSN for an account at this specific cell phone company.
National Suicide with eyes wide open.
It’s only suicide for the brainwashed who buy into the act. For the rest of us it’s more akin to cancer (The proponents, that is. The immigrants are just convenient fuel for the cancer cells in power.)
Reminder that Canadians didn’t ask for this
Canadians are asking for everything they get by being so apathetic
Nonsense. “Voters” have no power at all. Every candidate does the same thing, no matter what he promises.
Giving up on voting before giving up on mainstream media and mainstream political parties is like giving in to cancer before considering giving up carcinogens.
Pedro Norte
That’s like saying the immigrants didn’t ask for this either. Who voted for what?
Your new roommates will need fresh towels.
As well, your non- permanent arrivals are really permanent as well… isn’t it good to be king.
But why complain, instead go into the wild and live with the caribou.
They voted for it.
I put up a video on youtube telling everyone “Trudeau, he’s just not ready” before the election. A commercial taken from television telling the masses don’t vote for Trudeau.
They also didn’t ask for their wages and standard of living to be lowered due to excess immigration.
Random thought. It seems that, unlike Canada and the UK, the U.S. can borrow as much money as it wants. No matter how ridiculous our deficit, investors, both foreign and domestic, are there to lend money at paltry interest rates (4.3% for ten years?).
If this is the case, why should the U.S. collect taxes at all? Why not just borrow 100% of the budget?
Don’t give them any ideas, please!!!
TAXES FOR REVENUE ARE OBSOLETE
by Beardsley Ruml, Chairman of the Federal Reserve Bank of New York.
January, 1946, issue of American Affairs.
Ruml was a powerful man. He had been on the Rockefeller payroll for over 40 years by the time he delivered this speech. He was the inventor of withholding taxation. He proposed it when he was working with the Treasury Department in 1942. He got Congress to pass the law. Milton Friedman was one of the economists who designed the plan.
[In the speech] He argued that a central bank frees the government from the need to tax directly. Therefore, taxation is for social policy, not revenue.
“The necessity for a government to tax in order to maintain both its independence and its solvency is true for state and local governments, but it is not true for a national government. Two changes of the greatest consequence have occurred in the last twenty-five years which have substantially altered the position of the national state with respect to the financing of its current requirements.
The first of these changes is the gaining of vast new experience in the management of central banks.
The second change is the elimination, for domestic purposes, of the convertibility of the currency into gold.”
What he did not say was that this power, if exercised, would destroy the dollar. You would get “not worth a Continental,” all over again
Yep, but back in the day, we pretended we could pay back the debt, but at this point, it’s more “borrow and print until we can’t do it anymore.”
There’s a reason that assets in the past 3-4 years, from Bitcoin, to stonks, to gold, to crypto, to houses, have gone parabolic,
Nobody trusts that the government will do what it needs to do to defend the value of the dollar, as that would involve painful choices.
“borrow and print until we can’t do it anymore” is incorrect. It’s “Borrow and use inflation forever” — which is how it works with undisciplined governments, and it has always worked that way. The question is how much inflation can the economy tolerate? An economy can tolerate a moderate amount of inflation, but if it gets too much inflation, the economy gets very cranky.
This inflation is sort of a slow and soft default on the outstanding debt that was issued with lower interest rates.
Max-
Re: Ruml’s first change “… vast new experience in the management of central banks.”
The thinking of the Fed then, as now, was that they could wrestle the economy into submission, extending expansions at will, and avoiding reversals indefinitely, all based on their highly ridiculously favorable self-assessment.
Given that the policy actions of the 1920’s led to the painful ‘30’s, and that the policy actions of 1940’s and 50’s led to the tragic declines in USDollar purchasing power of the 1960’s and 70’s, his comment would have been nearer the mark if he had replaced “management” with “mis-management.”
Great post!
“And now was seen, taking possession of the nation, the idea that the ordinary needs of government may be legitimately met wholly by the means of paper currency; that taxes may be dispensed with. As a result, it was found that the assignat printing press was the one resource left to the government, and the increase in the volume of paper money became every day more appalling.”
-Andrew Dickson White, Fiat Money Inflation in France, 1876
When interest payments look like they will exceed the borrower’s (government) revenue, then the lenders will have already started to look elsewhere. Until then, all politicians will operate as if they know they only need to pay interest on debt to keep the gravy train going.
Einhal,
You should read “A Free Nation Deep in Debt” by McDonald, for a solid nuanced answer to this supposition. It sort of takes Timothy Mitchell’s ‘Carbon Democracy’ idea to it’s logical endpoint. Both are good reads.
The summary of above reading is that taxation for spending forces social consensus, without social consensus on what’s worth spending taxes on a democracy isn’t possible. The more simple explanation is that taxes at least nominally constrains politicians.
Einhal, you need the tax liability to drive universal acceptance of the currency inside your own borders. This is, as I understand it, central to Knapp’s “state money theory” which explains how citizens are driven to accept fiat currency.
Canadian authors usually quote America is 10 times of population. Not true. It is now close to 8 times of Canadian population. Canada population vs America has increased dramatically but not its GDP per capita. In fact the median and average (note that both) gave widened with America on the lower side.
Just a couple of years ago, Canada and California were about the same size. Now California is at 39 million and Canada at 41 million.
No worries. Just use the ‘tampa model’. Simply turn 3-2’s into 6-2’s or 9-2 and 1/2’s.
Parking is easy here. Simply park 6-9 cars on every bit of the lawn. Boom, affordability problem solved.
This comes with a caveat. It would be wise to learn spanglish mang.
In my area, a number of properties have part of the front or side lawn graveled over to create additional ‘parking spaces’ which sounds like your Tampa Model.
My neighbor has 4-5 cards in the driveway almost every night… this is a neighborhood of 900-1200 sqft ranches. I bet they turned their basement into an inlaw apartment.
Canada immigrants are mostly Indian and Chinese I believe
A lot are still coming in from Nigeria.
This is also the “minidorm” model where investors buy a 3/2 SFH in a residential neighborhoods and convert it into a 5/2 to increase cash flow by renting to 5 college students.
Ahh the good old days… I remember sharing a 3/1 with four buddies right after college.
Canada has become unlivable.
Even the remote areas are being crowded by people running from the cities.
Vancouver homelessness is so bad one thinks it’s living in a third world country.
What’s the purpose of so much immigration other than providing cheap labor for the corporate elite?
You barely can find a 3 lane highway in all of Canada, traffic is a nightmare even in residential areas, and the free healthcare has such wait times that you die a hundred times before you get to see a doctor.
The standard of living has fallen hugely in ten years.
Trudeau and especially Freeland are dangerous zealots.
Canada is the most extreme experiment in the world.
It’s communism lite, and it’s working as intended. And in clown world as your country circles the drain the prices of everything, even when it’s garbage (or maybe especially when it’s garbage, like 75 year old shacks and fake coins), goes to the moon. We are watching the western world commit suicide in real time.
Fidel is his father. Even Cubans laugh when I state this non truth.
Have you been to Boston recently?
Eastern Bunny,
I’ve thought for some time that Canada is the economy which closest resembles the UK.
Thanks for your post which confirms it.
You guys are hilarious with your misinformation. I guess I live in a different land.
This fall I was waiting in the lab area of our new hospital (4 years old?). My apt for routine bloodwork (yearly physical for preventative care…get a fix before getting sick concept) was scheduled for 9:00am. I arrived at 8:45. While waiting, I watched the weather scroll on a new big screen, relaxed in the comfy chair, and listened to my seatmates bitching about how Canada was now a third world country with health care. At 9:02 my name was called. They immediately asked me how I was called for 9:00? Reply? “Booked online”. They all had phones and could do the same. Got the blood draw and results available online same day. All good. Doc had the results same day and we have a deal. No call from him then I am to just assume all is good and he is happy. Been going to the same clinic since ’87. Just this Monday received a phone call from the BC Cancer screening department. They advised me that due to my family history (Dad and Aunt had colon cancer) , and because of my age, I would now receive a colonoscopy for preventative screening as opposed to a FIT test done at home. It is set for this coming December and I would receive a letter and phone call as to the date and time in my nearby city of Campbell River (hospital day surgery). My wife receives a yearly mammogram at a nearby rural clinic for a village of 300….a mobile clinic. She gets the notice every Feb, and will be phoned for the day and time of same. She has been a type1 diabetic for 52 years, and receives excellent care with specialists as needed. She has cataract surgery booked for April 9th.
Did I mention we pay no premiums or co pays for this coverage? I’ve had broken legs, other bones set, emergency stitching (active life and hard work) yaada yada and have yet to pay a fee.
So how can we have such different experiences? We are just retired working people.
Crowded and overrun rural areas? Really? Tell that to the elk I have to fence out of my home site. I catch fish off my own dock.
Everyone I know in my children’s age range are working. Some in trades, some professional. Trades earning in excess $200 k per year. My 40 year old neighbour runs logging equipment…earns $150K, anyway. My tenants both work….age 23 and drive new wheels. My teacher daughter earns $80K….has a home almost paid for, age 45. These kids, I call them the kids, went to public schools, had a plan, found work, earned a trade or went on to post secondary, and all bought homes. You have a dream, develop a plan, adjust as required, and continue on.
Leave the cities. There is a big empty land out there with lots of work if you learn the skills to fit with where you choose to live. If you have the smarts and time to comment on this site you can create a good life here. No one does it for you. I just don’t see how our experiences can be so different in the same country? As for England???? We actually have a few limeys who relocated here (our Valley) for the opportunities. And one of them was my father in law who left Manchester in the 50s. He just died a few years ago in our new hospital. Owned a few houses along the way….sailed his own built sailboat to the south pacific and lived there with his young family, then came home to work here as a pressman and printer. Had a long and successful life in this hellhole. :-)
“It is set for this coming December and I would receive a letter and phone call as to the date ….”
You have to wait till December to get a colonoscopy? And you disputed the wait-times others here have complained about??? That kind of 8-month wait-time for a procedure is exactly what they complained about. You just confirmed it, LOL.
“… Did I mention we pay no premiums or co pays for this coverage? I’ve had broken legs, other bones set, emergency stitching (active life and hard work) yaada yada and have yet to pay a fee. …”
As a former Ontarian, I disagree with your view that “free health care” isn’t free. BC may not have premiums but Ontario charges each taxpayer up to $900/yr, in addition to which:
1. High personal income tax rates, topping out at a combined 52.5% for Federal and Provincial;
2. 13% “Harmonized” sales/tax, including GST and PST;
3. Property tax rates that are extremely high, based on market value reassessment every three years;
4. Alcohol prices that are ridiculously high, in part due to the provincial monopoly on sales.
And as to medical care, there are long waits for any specialized procedure that can be booked a few days ahead at most facilities here in California. The one saving grace that medical care has in Canada is its single payer system, albeit for rationed care and paid for with ridiculously high taxes.
I am a naturalized Canadian. I lived in Canada for 8 years.
Fortunately, I never once had to visit a doctor, but I have many compatriots who complained about the difficult access to a specialist, even from many hours in the emergency room waiting to be examined by a doctor.
Now I live in my native country, which is the poorest in Europe, but when I need a specialist, I get an appointment the next day.
Only some planned operations that are not urgent can be rescheduled in time, but not more than 6 months.
In Canada I visited a dentist who could not detect that I had pulpitis and who felt safe only taking an x-ray. Even from the x-ray he couldn’t diagnose me. I came back to Europe with a grenoloma and had to have my tooth extracted.
Paul S.
I loved your post, I could echo it from the beautiful bountiful barren east coast. Thank you.
Ross
Thanks for that Paolo, but for everyone else it’s a nightmare. There’s a 2 to 3 year waiting list to even enroll with a family doctor, surgeries are in the many months to low years waiting list, and in Ontario they’ve set up local community ‘health’ centers – basically soviet-style triage centers with nurses – these centers’ apparent purpose is to enable drug addicts to inject without harassment – the cops are not even allowed to set foot in there.
For MRI you can wait for ages, or book one for a couple of days out and drive to Buffalo.
Meanwhile, via taxes and government debt issuance, the cost of this ‘free’ health care is about 600 dollars a month for every person (not family – person!) in Canada. Plus you get to pay a lump sum of up to 750 dollars when you pay your income taxes at the end of the year.
‘Even the remote areas are being crowded by people running from the cities.’
BC has roughly the land mass of Western Europe and the population of Paris. Yes Van is very crowded. That’s because about half BC’s population is there. But about ninety percent of the rest is not available for permanent habitation: it’s Crown land.
I’ve been looking at available acreage with brother and by the time you find something it is REALLY remote. Lots of ‘Fly in’, ‘boat access’ no road etc. Then browse Washington state and right away there is lots of choice for someone who is prepared to do some work. Why? Because unlike BC, only about a third of the state is owned by the state. In fact if I am given the stats of an acreage , and the price, I can tell if it’s in BC or Washington. The latter will be about a third of the price, after adjusting for C$ vs US$. .
I live in Nanaimo and have a GF in Comox, about 100K north,
Once past Parksville, there is nothing for 70K but tree farms. Not even a place to walk a dog. But you pass signs letting you know that just a mile or 2 away are little towns on the ocean, about 5 of them. Why on the ocean? Because when they were founded the only way to get around was by ship. Now we drive but on the highway there is 70K of nothing.
There is lots of room in BC, but the province needs to be opened up.
Here in the US….if the Feds say 10 million it is probably closer to 20 million…..just wait to see that property tax bill
We have a real loser running Canada and his name is silver spooned Justin Trudeau. Part time drama teacher and snow board instructor. Has never held a real job his whole life. If you think his old man did some damage to the country in the 60’s and 70’s…. Junior really showed dad how damage is done. Canada will never recover from this.
Dynasties are the new monarchies!
Well said! and unfortunately true. Thanks.
“J.T. hold my beer…. err ice cream cone.” – Cornpop
Castro did a number on the Cuban economy, too.
Canada is a one party system working for corporate overlords. It was Trudeau Sr who moved on affordable housing which was dismantled by conservative governments. Then the current liberal government moved on immigration without the thought of housing. Canada’s gdp growth increased 160%~ since 2000. Was this due to housing inflation? Maybe… Has housing inflation prevented a recession? Maybe… I’m not a fan of the current government but I’m also not a fan of the alternative. Damned if you don’t, damned if you do.
I’d feel better if the alternative were someone other than the deeply unserious Poilievre, a rentier who hasn’t had a job, ANY job, outside of Parliament in his entire life.
David Rosenberg commented on the disastrous immigration policy of the Trudeau Government on Wealthion a few days ago. The interview from one of my U of T alumnus is well worth watching. Among other things:
1. Over half of the “new arriveds” have settled in the Greater Toronto area, which has a population of ~ 5.5 million. The resulting strain on housing stock, public transit and other infrastructure is enormous.
2. Despite claims from pro-immigration lobbyists, the “newly arriveds” have decreased, not increased overall productivity in Canada. Rosenberg specifically cited the paucity of immigrants under Canada’s investor or business investment category, while most are so-called refugees and others admitted for social policy reasons.
3. Canada’s net private capital stock hasn’t increased in over 12 years.
4. Canada’s productivity has fallen in recent years and has lagged behind the US and other economies.
Asked what business drivers Canada has for investors, Rosenberg replied “Crude, canabis and condos”. Overall, he described Canada’s economy as being in markedly worse shape than the US, with a very poor outlook because of Trudeau’s disastrous policies.
I should have mentioned that the 2024-2025 Province of Ontario budget was announced yesterday, with a “planned” deficit of $9.8 billion. This is on top of hundred of billions of accumulated deficits Ontario has run in the past four decades. Funds are borrowed from the Canada Pension Plan or on capital markets, mainly in Canada.
This is relevant because unlike US states, including California, there is no balanced budget requirement in Ontario or any other Province. Ontario’s debt service costs are huge and consume over 6% of the budget. The accumulated deficits, lack of productivity growth, high tax rates that make California look frugal and vulnerability of its auto sector to significant cutback when recession hits make Ontario the most likely jurisdiction to experience a severe fiscal event in the near future.
Kiddieland money folks. A lot of Canada is on its way to solid insolvency.
I wouldn’t touch a longer term Ontario Government Bond!
HB Guy,
The balanced budget in CA means little. We will likely be 70 billion or more or of course much less if you listen to the governor. They basically used accounting tricks for much of it and all the budget people are newbies to the process. All it did was push it down the road and Newsom has projected deficits for rest of term of 30 billion plus per year. That said, governors always leave the next governors in the hole! CalMatters has some solid coverage.
Glen, I disagree. Current budgets may be “unbalanced” but they have to be brought into balance, either in the current or over two fiscal years. This is done in a variety of ways – pulling funds from reserves, issuing short term debt, etc.
The contrast I drew with Ontario and all Canadian Provinces was that deficits are allowed to accrue and increase over time, adding to total outstanding debt. Most Provinces also guarantee the debt of their Hydro Corporations. Ontario did so and incurred tens of billions of dollars for defunct nuclear plants.
Overall, California and most US states have their share of problems. Some, like IL and KY, may also experience a fiscal event in the near future due to pension liabilities. But the scale of Ontario’s 2024 $414.8 billion CAD debt will make these liabilities pale in comparison.
Canadian businesses have, for decades now, refused to make productivity enhancing capital investments, preferring to engage in real estate speculation and financial engineering, including stock buybacks. Canada is also a haven for oligopolies.
It’s not the workers, it’s the owners and their management flunkies that are to blame for Canada’s atrocious productivity record.
Not an economist or demographer but I don’t understand why Western leaders are panicking over anemic birth rates and allowing more and faster immigration than citizens are ready for. Businesses will substitute capital for labor just as they have for many years.
It’s complex but also a political issue. Countries that have a good balance of skilled employees and “unskilled” immigration show more positive acceptance and less nationalist tendencies. Common sense really as many see “unskilled” labor as a societal burden and a negative. Several good studies on the topic
Well said. All governments should endeavor to match immigration to their specific labor needs. That would also help solve the low birthrate issue.
Ideally but countries also have an obligation to assist countries that they have messed up as well and “unskilled” is often needed as hardly see most Americans doing the hard agricultural work that puts food on the table and both political parties know it. McCarthy sunk the last bill because he is from the Central Valley. Also, hardly a country in the global South that doesn’t fit that definition. Guatemala, Honduras, El Salvador, Nicaragua, Cuba and on and on. Europe and the US could have helped many of those countries industrialize locally to get where the value is added versus exploiting their environment, natural resources and labor. Complex issues that need to be solved as it won’t fix itself.
Well agricultural workers are definitely a category of workers we need, as well as doctors and engineers.
We have a refugee policy that, if strictly enforced, works just fine.
As far as the US helping countries that we “messed up”, I doubt we were intentionally messing them up at the time. Most likely, we were trying to fix them, which amounted to the same thing. Doubt we would have better results this time and having an open boarder undercuts the critical mass most of those countries need to demand reforms from their own government.
@Glen
The US has historically meddled in Central and South America, but it has been many years since for all but a very few countries. Most of those countries have only themselves to blame for their economy at this point.
The low hanging fruit for robotics/ automation is gone.
After Elon gave up on robotic car making he announced: ‘Humans are underrated’ Germany has mostly bailed on it, except for welding the frames, which we’ve all seen in videos. Sold their big outfit to China, who now have a major unemployment issue and no need of it, if they could get it working.
Biggest use of mechanical automation in US: packaging bulk foods into consumer sizes, with exact portions.
A lot of modern ‘ progress forever’ themes have plateaued. Civil aviation did more than 50 years ago. Cruising speed 500 mph then and now.
Moore’s Law?
‘Moore knew full well that the process could not go on for ever. Each doubling is more difficult, and more expensive, than the last. In September 2022 Jensen Huang, the boss of Nvidia, a chipmaker, became the latest observer to call time, declaring that Moore’s law was “dead”. Dec 13, 2023’
And of course for most applications of technology how much is doubling really needed? There is a market for it but by and large unnecessary. Much computing has gone horizontal versus vertical as well in many aspects.
The prices are going horizontal. That’s all that’s “necessary.”
Meant “prices are going vertical.”
I have been a firsthand witness to the exponential increase in computing power.
For a couple decades it served to provide a wonderful value.
For the past couple decades it’s served to expand the bandwidth and speed of creating “content.”
Most of this is generally useless and not even entertaining (but always “potentially” profitable).
We’re using a lot of computing power to animate dropdown menus and make “intuitive” GUIs that are less valuable and productive than most improvements a decade ago.
Now with AI: The. Great Plagiarist has arrived to simulate intelligence AND productivity.
I live in Canada — in the West Coast city of Vancouver, with its mountains and oceanfront properties — and I can testify that the influx of immigrants is straining EVERYTHING — the job market, and most of all places to rent.
First, jobs: All the unskilled labor that immigrated to Vancouver is hogging the lower end of the jobs spectrum. There is fierce competition for minimum wage work. You have to be better than ever, as a worker, just to make the employers’ grade.
In terms of rent, available housing is down to something like 1% vacancies. Only high-end rentals are freely available. Money talks, and bulls**t walks. I live in an SRO (single room occupancy) that costs a mere $550 a month Canadian, but it’s in a poor neighborhood in the middle of nowhere, with hardly room to stretch my feet out.
With the Liberals scheduled to leave power soon (an election is tentatively scheduled for 2025), the Conservative Party will hopefully dial back majorly on the number of immigrants allowed into the country. This will in turn help the job and the rent situations. With any luck.
Barron’s: These Stocks Moved the Most Today: Trump Media, GameStop, nCino, Cintas, Merck, NIO, Robinhood, Carnival, as the Dow soars more than 477 points…
MW: Dow has best day of 2024, S&P 500 books new record as Wall Street snaps three-day skid
DM: DM: Houston’s Democratic mayor reveals the Texas city is BROKE after decades of overspending that’s left it with a $160 MILLION deficit and has stopped them from even being able to pay firefighters
The Mayor of Houston says the city is ‘broke’ after overspending for decades. Democrat John Whitmire, who was elected in December, gave the bleak warning at a City Hill meeting this week where he proposed a five percent cut across all city spending to alleviate the cash-flow problem. ‘I think we can all agree that we’re broke,’ Whitmire said, before proposing the planned cuts. ‘This gives us a chance to discuss the financial picture of this City. It is broken! It was broken when I got here, ‘ he said. America’s fourth largest city is spending more money than it’s taking in, leaving it with a $160 million deficit.
Canada has always been picking the correct immigrants – meaning those with big bank balance — to come in as immigrants. Like the Hong Kong in early 1970’s fueling boom in Vancouver real estate; so calle refugees of Uganda Indians but with big money when they were expelled by Idi Amin; those who made big money in the oil rich countries and so on. Great way for easy wealth when the local population is unwilling to work hard or unable to get the proper tools needed for moving up the ladder. But the effect is inflation in shelter etc. Especially those who immigrate are also the paper pushers and not tradesperson and so on.
*** A Canadian in the 1970’s with a Ph.D. in Engineering from a great U there***
Housing bear Garth Turner posted today that Ontario might already be in a recession.
The winners of this charade are the landlords, public sector unions and teacher pension plans (they invest heavily in commercial real estate where families go shopping).
And the public sector unions and teacher unions benefit mightily from open immigration. Teachers would be laid off if there were not large numbers of immigrants. Immigrants help landlords, doctors, lawyers, psychiatric social workers, teachers, ESL teachers and teachers of the handicapped. Immigrants provide jobs for police, the law enforcement industry, prison guards etc. Since neither Canada nor the US seems to want to create a jobs program that would provide a living wage for a single earner family which was the norm in the1950s I have to wonder why people wonder about the low birth rates. With the wage rates that exist I am surprised anyone has children unless they are poor migrants who get supported by the state. All of this could be solved with appropriate tax and wage policy.
Felix_47,
My compliments. A lot of people publish whole books nowadays that say less than that.
Great post F47, here in CA the teachers unions are big supporters f open borders and behind many of the YIMBY groups pushing for more development. The majority of GenXers had less kids than their parents and it is looking like Millennials will also have less kids than their parents (and the Zoomers will have even less kids). In 1950 SF had ~180,000 kids <18 (24% of the population) and in 2010 SF was down to ~107,000 kids <18 (13% of the population)
Canada has a very low fertility rate at 1.45. But rather than investigating the root causes, the current leaders want to use that as an excuse to pack a million people every few months in the the few major cities.
Every new sucker who lands in Canada is a customer for the big 5 banks, telecoms, grocery empires and corporate landlords.
Every sucker justifies the overpaid teachers, the bloated public sector and cops to get more hefty salary increases.
The average Canadian and small business do not benefit from the population ponzi scheme.
After the first housing bust in the US, Larry Summers encouraged Bernanke and the FED to “blow another housing bubble” as the cure. Despite all of the QE and the meddling in the housing market by the FED and .gov, they were still unable to stem the massive, cascading losses and freefall of house prices for years.
They (central banks, ie. central “planners”) used that situation as a learning experience on what not to do, and how better to blow bubbles, and are now flooding the US, Canada and all western countries with cheap, unskilled labor. They know that if they overwhelm the demand side of the equation insofar as housing is concerned, there will not be a massive crash.
These people deserve to be tried for treason, in my opinion. They have put the lives of their respective legal citizens in peril in the interests of a rapaciously greedy, ultra-thin slice of extraordinarily wealthy people who are busy amassing fortunes which make anything in the past pale by comparison.
If such inflation continues, they’ll have to loosen up laws so people can sleep in their cars. They’ll need a port-a-potty on every corner,
Already been going on for a decade. They’re called “safe parking lots,” and working women are a large percentage of those affected. Really disgusting politicians have caused this, and they continue to push the same policies.
Elizabeth Warren has been hammering Powell to lower rates. She just so happens to be a slumlord herself. This country is finished.
Depth Charge,
The US could recover with proper education and activism. Reality is it isn’t bad enough for the majority of the US compared to the world at large and even much of Europe. That said, I don’t see that starting here as change doesn’t typically happen without pain and most aren’t truly feeling it. It also requires people through a lifetime of propaganda, which of course is a universal thing but it is been taken to a new level over last couple of decades.
Not to say some people haven’t tried but none of the policies are effective and of course are extremely costly in a time of declining revenues.
Depth charge, its called ‘klownsian economics’.
Create even more debt in order to fix the bad debt problem. It’s so easy mang.
Wolf, are you planning on a similar article for the US, or is the effect of immigration not quite noticeable yet?
We don’t have good figures on population growth. The CBO and the Census Bureau now have vastly different estimates of population growth since the pandemic, with the CBO’s estimate being much higher. It seems nobody really knows. So I’m not going to wade into this. The Census Bureau will eventually adjust its figures. So we’ll see.
This is something I am totally puzzled about – CBP has been accused many times that the agency collects A LOT of information (including biometrics) from non-citizens entering or leaving the country through CBP One app and platform. Every asylum seeker and every legal immigrant has an alien number (A-number) issued at the port of entry. Every nonimmigrant has a I94 arrival record. The only group of people potentially not having any of those numbers is someone literally crossing a river in the middle of the night without any processing whatsoever (aka illegals, by definition).
So I don’t get how this is even possible for any federal agency to not know the number of people in the country. If it is indeed the case, it’s a statement of uselessness for all border agencies that should be abolished immediately, just for the sake of not spending money on a function that is not performed.
And just to step back – this is obviously not an attack at anyone here, just a pointless venting at the state of affairs in 2024.
Actually, I think a post where you get into the weeds on US population growth and the conflicting estimates would be very interesting to people (or maybe just me :)
Howdy Lone Wolf. Any new charts on New Residential Construction in Canada? Increases or Decreases?
If I recall correctly, Canadian housing starts peaked in the early to mid ‘70s — about 20 million Canadians ago.
The BoC said yesterday that Canada has a “productivity emergency “.
Coming from a central bank I’d suggest that’s fighting talk.
Everyone I know is talking about moving out.
Nobody seems to take their job seriously.
Cash in hand rampant.
Crime and fraud everywhere.
My whole family of origin lives in Canada and we are talking about 30 people including cousins. No one is talking about leaving Canada.
In 2023 there was a 241% increase in illegal crossings
from Canada into the US.
Peanuts compared to our southern border. Could have been the southpark gang trying to sneak back in.
there was a news report in Michigan explaining that the influx from the northern border had something to do with a loophole for people in Mexico to fly into Canada without a Visa or passport(need to double check which) and they noticed within 48hrs of the people arriving in Canada they were caught on the American side of the border by border patrols. Our gov’t has our borders wide open to people with horribly dangerous connections and backgrounds with no checks in place to protect anyone.
Prairies
I can remember way back in ” the day”, I had a guy who did
excavating for my business. He loved to go fishing in Canada.
He always had to have the day off before they traveled.
They would spend that day stashing booze, bait, and cigars for the border crossing.
Times have changed.
If they are going south….make sure they do their homework.
Toronto police recommending their citizens to leave their car keys next to the door for the thieves. In true hold my beer fashion, MN AG is pointing the finger at car manufacturers for making it to easy to steal.
The grass may not be greener……
Tom
Speaking of the grass, most migrants are actually quite harmless, they’re like the buffalo of old, roam to wherever, eat, reproduce.
But they will ruin the “normal” if they don’t move on. And like the buffalo, they are traveling by the millions.
“ According to the Canadian Institute for Health Research, over the next 20 years, Canada’s senior population is expected to grow by 68 per cent. This means there will be an unprecedented number of seniors moving, whether downsizing to smaller homes, moving into retired living communities, or relocating to be closer to family”
Probably priced in?
But at the current growth rate, Canada’s population is going to grow 100% over the next 20 years, so seniors are falling behind, surpassed by young immigrants?
Sounds like a great market opportunity to buy or build rental properties!!!!
Besides, large sections of Florida, Texas and other American cities may be uninsurable in the next 20 years. Fires, floods, hurricanes, tornados, hailstorms, not to mention rising tides inundating coastal cities.
The government has already dialed back non-permanent immigration a lot. The recent rates will not be sustained (and thank goodness for that)
I believe it was increased around 100% from 2019 levels and the government plans on reducing it 20% from current levels… starting next year.
Interesting. Is the jobs numbers really the rise in immigration here in the U.S.? In the state of Maine where I live, the population is about 1.3 million. Not sure about information I read about the age of people. I did read Maines population is 60% over the age of fifty. The state needs workers in hospitality, nursing homes, nurses etc. Housing shortage here with many affordable housing projects going up in about ten cities.
Canada is a WEF experiment gone bad. The Liberal governement has basically destroyed Canada. Truedeau is going full scorched earth for the next party . A devalued currency, high defecits, very high immigration and the list goes on and on. I’m leaving this sh!thole country this year. Good riddance !!
Does anyone up there have provincial break-up in next 2 years on their bingo card?
My brother after over a decade in Ontario is also about to move out of Canada. A family of high-earning, caucasian ultra-qualified millennials.
Ridiculous housing, nominally free but practically unaccessible healthcare, rampant underreported inflation, limitless immigration, and the recent carbon retail taxes outweighted that famous Canadian politeness.
Whoever approved this global flood of immigration, equally affecting US, Europe, and Canada made a fatal flaw in their policy analysis:
previous episodes of immigration tapped on massive qualified, hard-working human capital left after the breakdown of the former Warsaw Treaty.
The current breed of the newcomers are not your former space or manufacturing engineers, but more like ex-cartel and many former prisoners.
That will prove to be a very costly mistake for most of the Wolf’s readers.
Canada is already in a recession and has been for quite a while. Our government stats agency StatsCan reports gdp without adjusting for changes in population. So the figure they report which has been around 1.0% over the past year would be negative when population growth is accounted for.
StatsCan laughably calls this real gdp growth because it takes inflation into account. I guess this is the standard definition for real gdp growth. In this case real is anything but real.
Wolf always gets it right reason why I read everything he posts. Few see the connection between high levels of immigration and corresponding increase in rents and Real estate value and even fewer talk about it. I have personally benefited from this but I truly feel for those looking to purchase or having to rent. I still cannot believe those opposed to uncontrolled immigration remain silent on this connection, if I were a politician I would be talking about this all the time in order to get elected or remain elected.
Also, heading into highest levels of emigration… both citizens and recent arrivals leaving.
Our population numbers are somewhat chimeric as we don’t track leavers and most of them do not post papers (as they are supposed to do). So we have no idea of who is actually resident and the delta on actual and estimated is huge.
As a side business we are renting to young adults from EU coming as temporary foreign workers. About 25% of them is applying for permanent residency status in Canada and the rest will return to EU. Most are well educated and are from well off families. They usually take low paid service jobs and girls are making fortunes on tips alone.They have good time and enjoy outdoor activities. Regarding the housing issues, I’ve notice that young Asians discovered the credit and everyone wants to have a mortgage and dreams about landlording. Newcomers don’t comprehend the concept of negative cash flow, they want the mortgage loan regardless of the cost. Everybody is projecting an unimaginable capital gains. On my street one set of speculators is selling vacant homes to the other flippers. Families stopped bidding due to the crazy home prices. Regarding the business conditions here in Western Canada, my bus phone is ringing 24/7, I can not take any new customers – too busy. Nobody is questioning our prices, the only question is how fast we can provide our service. Our customers are overwhelmed as well by the demand. Business is booming, and the inflation is booming as well.
Where I live friends sell the same house or houses back and forth many times to push up home prices or values in entire neighbourhoods.
In the states business folks love immigrants. You see since most are undocumented, the business folks pay the immigrants no ssi, no workmans comp, and they work for half price under the table, with a smile on their faces remitting every penny back home. Its a win win for them. Thats why you always hear ‘they just work harder than american workers.’ They font work harder, they work much cheeper. From usa bussiness owners. Its the biggest con game going.
You see its a ruse.
Hell if i wanted to triple my bottom line, I’d employ them too. It’s a stinking windfall, but you will not hear any of this on ‘faux noise.’
US need to allow legal immigration at all economic levels to fill jobs needed and crack down hard on illegal, hard…both for the illegal alien and anybody willfully employing them. Lose a business license.
I’m also partial to eliminating birthright citizenship as it doesn’t serve much of a purpose anymore.
That’s pretty much what I saw when I was recently working in restaurants. As a US citizen I have to do eVerify, give them all my paperwork, and sign a form saying I promise to speak English at work. Then they hire a couple guys from El Salvador who don’t speak a word of English and are drunk all the time and give them all my hours. Fortunately both of them got deported and I got my hours back.
*don’t
Thank you. I’m all for reasonable and responsible levels of immigration- all my grandparents were immigrants to Canada. As extreme as it might seem, I’m not sure treason isn’t an accurate accusation. The Canadian federal government isn’t just attempting to replace boomers in the workforce or even trying to compensate for a lower retention rate. Their obviously trying to grow the economy on gross bulk increases to consumers.
From a recent report from Atom:
Activity by short-term investors declined at the fastest pace since 2008, while investment returns sank to their lowest level since 2007
Apparently, new legislation in Canada will add tax to flipped houses at 20%, starting in 2025.
You simply cannot have it both ways. Decades of sending in economic hitmen into Latin American countries to extract asymmetrical trade deals while propping up local dictators and not expect an equal and opposite reaction. Immigration is the result of our collective avarice coming home to roost.
Yes and we ain’t seen nothin yet when it comes to climate migration. You can’t outrun the externalities forever but imputing blame to the poor is evergreen.
The claim that immigration causes housing costs to increase seems like it would have to be true. But the standard rebuttal offered by team ‘pro immigration’ is to say there is no correlation between annual % changes in immigration and housing costs. This article suggests that while there might be no correlation between immigration and house prices, there is a strong correlation between immigration and rental prices.
The problem is the sudden surge in immigration. If the population grows by 1% every year, housing construction follows along, and over the years, the housing stock will increase by about 1% a year because there is demand, and people are paying for it, with some years in underproduction and some years in overproduction. And if population growth is balanced with new construction over the years, it’s not a primary factor in rent inflation — regular inflationary factors are at work then.
But population growth jumped from 1% to 2% and then to over 3% and no one is prepared for it, and so you have a surge in demand for rentals without a surge of supply of rentals. And so that’s what we see here.
Why are they allowing this level of immigration in Canada? It seems like it’s a huge negative for the economy and society. Someone powerful has to be benefitting– I couldn’t see any other way the government would allow it.
I’m skeptical of these numbers. I think you mentioned, USA numbers are unreliable. How reliable are these?
I see rents increasing during the pandemic yet growth went to almost zero (border was closed over 1 yr). Also real estate is headed downward. Why does this population boom not affect real estate? Everyone is low-income?
Anecdotally things do not seem busier here in Toronto. I wonder where all the million went.
Another thing I have heard is that they are unable to track who is leaving Canada. Do we have any inkling of the accuracy of it all?
The immigration data in Canada is based on people who are documented and have visas: holders of permanent and temporary visas plus asylum seekers. These are known numbers. Since Canada has been encouraging this influx, it has been eagerly handing out these visas, and that’s what we see here in the numbers.
The data problem in the US comes from people walking across the border in very large numbers without being documented. Many of them are sent back, and then they try again, and are sent back again. So the border-crossings figure that we get include multiple-crossers each time, and they’re not even in the US. So that’s not a good figure to use for anything. So illegal immigration in the US is very hard to estimate. The 10-year Census does a decent job in counting all people regardless of how they’re in the US, but the last Census was in 2020, the and surge of immigration started afterwards, and so we don’t know.
Canada has become an extremely expensive country to live in. My youngest son lives in Vancouver pays $1800/month for a 1 BR 400 Square foot Apartment in the basement of a 100 year old building. He had to compete with 50 people on the rent application. $10 for a beer there. My daughter lives in a nicer apartment in Calgary 1 BR -450. square feet $1800/month plus another $400/month for 2 parking spots. She works for a civil engineering company designing sprawling suburban neighborhoods with tiny yards. Calgary is absorbing huge amounts of immigration from China, India and Africa . Immigrants are basically running the service sector economy.
Whew, now that we’re having a super smooth soft landing in a helicopter, the housing bubble is no longer an issue. Excellent time to still get in on the AI perpetual cash machine and buy a new McMansion, with monster EV SUV!
Also don’t see:
“ The simple fact is that record highs in the equity market have buoyed the economic narrative. Yet despite one or two key data points coming in surprisingly robust — particularly non-farm payrolls and GDP — much else has looked frail,” Edwards said in a note on Wednesday. “All this is (dangerously) reminiscent of 2007, when all around were telling me I was wrong and should give up calling that much-delayed recession,” he later added.
Edwards was among the strategists who foresaw the dot-com crash in the early 2000s and the bursting of the bubble that kicked off the Great Financial Crisis. ”
There was never a landing at all, it’s gaining altitude. There is now a massive speculative melt-up in all assets and the FED is standing by just watching. It used to be said that “the FED is there to take away the punch bowl when the party is getting started.” Now they are just spiking and re-filling it.
Almost a year ago, Powell was focusing on near term forward spread, and it’s amazing reversal, probably safe to say the soft landing here and Canada will be silky smooth and unnoticed.
“That spread, which has been in negative territory since November, plunged to new lows this week, standing at nearly minus 170 basis points on Thursday.
Fed Chair Jerome Powell said last year that the 18-month U.S. Treasury yield curve was the most reliable warning of an upcoming recession.”
The spreads about minus 160 now and falling…
Frankly, if I were a young person looking to buy a home, I’d buy right now…..before the prices spike…..imagine what is going to happen when this tough group of enraged FOMC rabbits ever begins to lower rates. The millennials, the largest generation that has delayed buying since they generally matured slower, just coming into their better earning years, are going to be buying up every house around.
By the way…….the central banks are so impressed by Mr JP’s rate of QT that in spite of the dollar holding up and slight interest rate firming……gold is exploding up 30 today after making new highs consistently since January.
We’ve moved from around 1800 per ounce in October to 2240, about 24%, in six months for only one reason…..the central banks are buying all they can get. Once a central bank buys….they very seldom sell…….but of course…..the central banks are stupid because they are putting billions of dollars into nothing but yellow rocks…….sarcasm……but don’t you worry…..JP will get enraged one of these days……unemployment claims……no movement…..yep…..in a decade or two he might decide to get the 5 trillion he dumped on the sidewalk cleaned up……JP’s dilemma…..He can’t understand why leaving a net of 3 trillion on the sidewalk means that there is 3 extra trillion chasing the same amount of goods and services. He flunked economics 101. Not to mention the more important velocity. Folks that are employed and have no fear of being laid off…..will mortgage their mother to buy that trip to Iceland. Folks that fear being laid off…..will increase their savings rate.
I sold my home about two years ago. About two hours west of Seattle for about $430k.
It got several upgrades and just listed for $580k.
Seems insane for a place under 1400 sq/ft, but the silver tsunami apparently has no limits and deeper pockets than I ever dreamed about.
This is interesting for me to watch, because I thought I sold at the top.
Listed and sold are not the same thing. There are all kinds of things in between, including pulled off the market and reduced asking price.
The biggest problem with the rental situation in Canada is the basements of Brampton and the basements of Scarborough are already at full capacity and very few of those houses have a garage. This means renting out tents in the backyards of those homes. The immigrants do not have enough money to put a trailer or motorhome onto the driveways of these homes so the driveways will stay unoccupied.
Thought you were going to make a comment about tents holding up poorly to bullets. I’ve seen tent encampments in Belleville and Brockville (in Ontario). No way, no how, in my wildest dreams would I ever imagine these places having the levels of homelessness that they do. We all know about the federal government renting hotel rooms for “new” families, right? I thought I remember the bill being around $500 to $550 million to house these families in hotels last year. Strange times we’re in.
I saw a tent city visible from the 401 last year driving northbound past the Brockville exit. I could not believe my eyes either. I still question if what I saw was real. Brockville! A small town in the St. Lawrence. Of all places for a homeless encampment.