Record gain in national headcount raises concerns about adequacy of housing supply

In Snapshot # 18 titled “More going away than coming from away dampens Newfoundland and Labrador’s near term outlook”, we highlighted the fact that, over the past three years, more people left the province than “came from away”.

Despite the shrinkage in population in its easternmost province, Canada’s population increased by an unprecedented 531,497 people over the past four quarters. Year over year, the population rose by an unprecedented +1.4%, more than twice the growth rate exhibited by the U.S. and Britain (+0.6%), and well above gains in Germany (+0.3%) and France (+0.2%). Both Italy and Japan saw their populations shrink by -0.2% in 2018. For the former, it’s the second consecutive year of decline: for the latter, there’s been population reduction since 2010.

This brief overview of the latest population stats highlights four significant trends and their potential impact on housing demand. First, among the nine provinces which saw their population increase in 2018/19, almost half (47%) of the increase in total headcount was due to an unprecedented gain of 248,000 in Ontario. This marked the fourth consecutive year in which the province’s population has increased by more than 150,000 and it was mainly driven by a 200,000 gain in international migration (including 17,000 asylum claimants) plus a net inflow from other provinces totaling 12,000, the bulk (6,600) of which originated in Quebec.

Although there are clouds over the outlook for Ontario’s most important industrial driver (manufacturing), the province’s low unemployment rate and high job vacancy rate suggest that it will continue to attract the bulk of Canada’s international and domestic migrants over the next several quarters.

Second, after seeing a steady net outflow of migrants to other provinces (mostly Ontario) since the mid-1960’s, net interprovincial migration turned positive in Quebec in the second quarter of this year for the first time since the fourth quarter of 2009. At the same time, the province welcomed an unprecedented 33,000 international migrants. This very strong pattern of international and interprovincial net migration in the second quarter made a significant contribution to the record 97,000 rise in the province’s population over the past four quarters. It is worth noting that according to Immigration, Refugees and Citizenship Canada (IRCC), Quebec hosted 8,700 refugee claimants during the period June 30, 2018 to July 1, 2019.

Third, following the exodus of its residents to other provinces in the wake of the collapse in oil prices in 2014, net interprovincial migration made a positive contribution to Alberta’s population growth in 2018/19 for the first time since 2016/17.

Fuelled by this net inflow of migrants from other provinces, mostly Ontario, plus 38,000 international migrants and a natural increase of 43,000, the province’s population posted its largest four-quarter gain since 2014. Since 2016/17, growth of Alberta’s population has accelerated from 1.1% y/y to 1.6% y/y. Despite flagging growth of energy investment and significant volatility in energy prices, there is evidence of strengthening labour demand reflected by a gradual increase in the province’s job vacancy rate and a gradual decline in the province’s unemployment rate.

The fourth and final trend indicated by the most recent population stats relates to the Atlantic provinces. Except for the above-noted shrinkage in Newfoundland and Labrador, population growth has accelerated in Prince Edward Island, Nova Scotia and New Brunswick over the past four years. Among these three provinces, Prince Edward Island’s population was up by 2.2% in 2018/19, the fastest in the country and well north of the 0.2% y/y gain it posted in 2013/14. After four down years, Nova Scotia has seen the growth of its population accelerate from 0.8% to 1.2% in 2018/19, its highest rate of growth in more than 50 years. The combination of an inflow of 6,500 international migrants and 600 people from other provinces helped to boost New Brunswick’s population by 0.8% in 2018/19 , its fastest pace since 1984.

Finally, one of the major questions raised by this unprecedented increase in population is “What will be its impact on housing demand?” It is possible to put some perspective on this question by comparing the ratio of annual population growth to housing starts over the past four years across the ten provinces. The above (national average) ratio of population growth to housing starts in Prince Edward Island, Saskatchewan, Manitoba, and Ontario, illustrated by the chart, indicates that potential demand for new homes has been outpacing growth of the housing stock (i.e. supply) in these provinces relative to the rest of the country and it should contribute to a stronger pattern of new construction in them.

Towards the end of her articling, David Bristow, the head of the firm’s construction group, asked if she had any interest in practising construction law.

“My close family friend told me he also practised construction law in his early years and said that I would get plenty of courtroom experience and develop expertise in contract law and bankruptcy if I accepted David’s invitation.”

That was in the mid-1990s when there were very few female construction lawyers, says Astolfo, who realized she could distinguish herself “quite quickly” if she went that route.

“After my first year of practice, I knew this was an area of law that was exciting, ever changing, and would keep me engaged for a long time.”

After articling and working as an associate with Fraser & Beatty (now Dentons), she moved on to a number of other firms and then joined WeirFoulds in 2016. Along the way there have been a number of honours. In 2006 Astolfo was certified by the Law Society of Upper Canada as a specialist in construction law, a ranking with strict eligibility benchmarks including a minimum of seven years’ experience, five of which must include a 30 per cent component of construction law. Four references from lawyers outside of a candidate’s firm are also required.

And, then last year, she was invited to become a member of the Canadian College of Construction Lawyers, a process requiring being vetted by all the college’s members or ‘fellows.’

Touching on her volunteer speaking engagements, which range from five to seven yearly, she says the motive is to help other lawyers in the way she was helped.

“I have had excellent mentors throughout my years of practice so I always make myself available to help other lawyers and try to mentor in the same way that I was mentored,” says Astolfo.

“Whenever I speak at a continuing education event, I am willing to share my ‘tips’ and ‘knowledge’ with members of the bar. If we keep something a secret it doesn’t help the profession.”

At the OBA’s dinner in June where she received the award, Astolfo spoke about the need for ‘balance’ in lawyers’ professional and personal lives and that’s an objective she strives for in her own life. Every evening she leaves the office ‘promptly’ at 5.15 in order to pick up her daughter from school.

“That has never been a problem with clients or at any of the firms that I have worked at.”

“After my first year of practice, I knew this was an area of law that was exciting, ever changing, and would keep me engaged for a long time,”

Sandra Astolfo WeirFoulds LLP