If it is not already apparent, Canada is welcoming thousands of newcomers daily, driving historic levels of population growth.
Canada saw a record gain in the first quarter as the population ballooned by 292,232 people from January 1 to April 1, and 1.21 million people (3.1 per cent) over the course of the year. While adding to economic activity and labour supply, the swelling number of newcomers adds pressure to an undersupplied housing market, particularly the rental market.
B.C.’s population growth aligns with national figures. During the first quarter, B.C.’s population increased by 38,600 people (0.7 per cent), with a four-quarter increase of nearly 164,000 (3.1 per cent) to lift its estimated population to a record 5.43 million people. This was the strongest pace of first-quarter growth on record dating back to at least the 1970s in terms of both the number of people and the percentage change.
The entirety of the net increase reflected newcomers from outside the country. Net international migration reached 40,840 people, which was nearly double year-ago gains and much higher than the 14,200 netted during the same quarter in 2019. The province has seen higher permanent resident inflows (24,482 people) which was up 20 per cent from last year, but most of the gain owes to net non-permanent residents, which ripped higher to 19,221 people during the quarter, compared to 3,300 a year ago. The flow of temporary residents has soared in recent quarters with high demand for work and study permits. This is unlikely to maintain the same pace.
In contrast, B.C. is losing out to other provinces. For a third straight quarter, net interprovincial migration was negative with a net outflow of 600 people – marking the first negative Q1 reading since 2013. A year ago, B.C. recorded a net gain of 2,816 people from other provinces. Housing affordability is a key driver of this downturn as B.C. home prices and rents skyrocket from already-elevated levels, pushing residents to other areas of the country, particularly Alberta.
International immigration will continue to lift population levels in B.C., particularly in larger urban markets. That said, excessive costs of living and home prices will push more residents out of the province in search of more affordable options to raise families and build savings.
B.C. consumer price inflation decelerated to 3.5 per cent year over year in May compared to 4.3 per cent in April. This points to slowing inflation and was slightly higher than the national reading. On a monthly basis, provincial prices rose 0.4 per cent as consumers still faced higher costs. Core CPI (excluding energy and food) fell from 4.2 per cent in April to 3.5 per cent in May. Goods prices edged down 0.07 per cent over the month for the first time in 2023 while services prices continued to grow, up 0.7 per cent from last month.
Gasoline prices in B.C. remained low (down 17.7 per cent) on a year-over-year basis driven largely by the base-year effect from the surge in energy prices since March last year. Overall, energy prices were down 10.1 per cent compared to May 2022. On a monthly basis, B.C. gasoline prices dropped 0.7 per cent and energy prices declined 0.6 per cent in May, the first monthly decrease following four straight months of increases for both categories.
Food prices in B.C. remained elevated on a year-over-year basis, up 7.7 per cent from May last year and up from 7.5 per cent in April. B.C. shelter costs pulled higher from 4.9 per cent to five per cent in May, driven by mortgage interest rates. •
Bryan Yu is chief economist at Central 1.