“ People in their late 20s to early 40s are the most likely to start businesses, but that demographic is shrinking with Canada's aging population, leaving a smaller pool of candidates as potential founders.”
Canada has an ace in the hole here (that America doesn’t) in the form of a relatively generous immigration program.
It’s time it leans on immigrants to bolster its entrepreneurship. Immigrants are by definition self-selected risk takers it’s a match made in heaven. However to fix it Canada needs:
a) less regulations on work requirements for immigrants (it’s less complicated than America but that’s not saying much)
b) better funding environment (I’m not a funder/investor so not qualified to speak to this, but I know it sucks)
c) housing, housing and lots of cheap housing especially, in the big cities and college towns where most budding entrepreneurs build the networks required to succeed.
Without c) esp Canada is DOA. But that’s a whole other post.
The relatively generous immigration program is resulting in higher population growth than housing built spiking property prices. More and more of the Canadian population over the last 20 years has been recent immigrants and entrepreneurship has cratered. It’s not evident to me at all Canadas immigrant friendly stance is helping with entrepreneurship and it’s fairly plausible that it’s having an adverse effect, although it’s also plausible that it has prevented the situation from being worse than it otherwise would have been, and additionally possible that tweaks to immigration might result in immigration being more of an engine of entrepreneurship than it is right now.
To me, it seems to me that immigration is mostly motivated by politicians desperate to cover up the cost of their unwise deficit spending and liabilities by diffusing the cost across more people, as well as enriching the landed gentry with more rents. They couldn’t give two craps about helping recent immigrants start successful businesses, they want them to benefit their interests immediately, not incubate some far off benefit twenty years in the future.
Birth-right citizen Canadians just aren’t having enough children to make that work in a modern economy requiring a big base of young workers.
Sure we have enough housing to support our slowing aging/dying native-born population if we shut off immigration. That’s not actually an improvement at all.
We agree that cost of living + housing costs are cratering entrepreneurship, and that the simple effect of supply (slow home building, restrictive zoning) and demand (more people/immigration) is at play.
However, I think it’s not an option to slow down on either immigration or keep the current slow trickle of residence building as-is. We need BOTH faster, because we let this problem fester.
But everytime it’s complaints about too much demand, but never a complain about supply. Even though they are both similar political problems. I don’t want to speculate why.
Immigrants have more than proven themselves to be good entrepreneurs once the shackles I mentioned above have been removed.
Nobody complains about supply? News to me. Trudeau has been boasting about how his sizeable immigration increases will solve the housing crisis for months now with a greater supply of workers to address the “labour shortage”. The “labour shortage” being the biggest buzzword to complain about lack of supply. Meanwhile construction has been basically stagnant and even backsliding slightly according to statscan data while he has basically given a big shot of adrenaline to demand.
Whereas a five year old could understand, if we literally just stopped all immigration tomorrow (this would have extremely bad consequences like causing an immediate recession and huge unemployment but hypothetically) housing prices would crater because Canadians don’t reproduce at anything close to replacement. But people go oh no no, the REAL solution to the problem is the thing causing the problem.
Immigration I accept is a lesser evil to the alternative, but it’s certainly not the solution to the housing crisis. It’s just not.
The federal government is (mostly) inconsequential on housing supply. Trudeau knows this and so has to do all kinds of other song and dances to distract.
If we have a labor problem let’s import construction workers, fix zoning, build a large housing fund and construction department and mobilize it. Actually work the problem on a provincial and municipal level.
As opposed to constantly kvetching about supply and trying to murder it (see: foreign buyers bans, airbnb bans and now the ever popular immigration stoppages). It’s all whack-a-mole band aids that are clearly not working.
Solve the actual problem, and that’s supply, supply and supply.
I have friends who moved north and applied for their entrepreneurship visa. The whole program is a pay for play scam where local VCs and incubators either demand money up front to "join" their incubator or give ridiculous equity terms in the hope of cornering a desperate founder who won't or can't immigrate easily to the states. The whole thing is a money making grift designed to enrich the friends of their politicians.
Controversial opinion: that program is mostly inconsequential at scale.
The real needle driver is the much maligned student visa program. While stuffing students into rando colleges in the far flung regions of the country (“diploma mills”) isn’t great, the mainstay colleges/universities should be encouraged to double/triple their intake.
There is an existing workflow that turns students into well-networked, educated individuals empowered to manouever the levers of power/capital. Just lean on that more.
Uncontrolled immigration without assimilation can have disastrous consequences. And assimilation is a polite way of saying "give up your culture and adopt ours."
Unfortunately, without assimilation, all the politics and problems of the homeland will follow the diaspora to the new host country. It has been seen time and time again:
- Italian and Irish emigration to the US
- Migration from the Indian subcontinent as well as Muslim countries of Africa and the Middle East into Europe and North America
If you cannot solve this but still want immigrants, the numbers have to be reduced massively and some kind of pause between waves will be required so that gradual assimilation can be achieved.
I live in Victoria, and while our situation is special (we’re on the tip of an island and can’t build in many directions because it’s ocean), a few developers I’ve spoken to are very confident that the housing issue’s greatest barrier is labour.
I asked if immigration could address this, and they each pointed out that a. Immigrants can’t afford to work in this industry in places where we need housing the most, b. While building requires unskilled labour, it also requires highly skilled labour that is at an unprecedented shortage which isn’t easily or rapidly corrected with immigration, c. Cities and neighborhoods are deeply attached to their reasons for resisting various densification projects, and breaking through arbitrary red tape here is an immense and intractably expensive undertaking.
They painted a very bleak picture of the housing situation, making it seem as though huge changes need to occur in order for meaningful progress to be made.
This might be less of an issue in other cities. I’m not sure.
"Cities and neighborhoods are deeply attached to their reasons for resisting various densification projects, and breaking through arbitrary red tape here is an immense and intractably expensive undertaking."
The large-scale tolerance of this is basically permanently resigning Canada to degrowth. So no, lets not accept this. It is what most cities are facing and the provincial governments need to put an end to it.
What we need is massive training/re-training + labor importation program for the construction industry (and probably also healthcare, but I digress), and WW2 level mobilization in construction, anything short of that and I'm betting the economic and entrepreneurial problems get entrenched for a century.
I agree with this notion politically, it would be a huge benefit if the federal government:
#1 - took in a bigger slice of taxes
#2 - redistributed them to municipalities
#3 - made this redistribution contingent on densification.
What we have now is some tragedy of the commons crap where everybody wants to address the housing prices, but if you call to densify any neighbourhood the local busybodies will cry bloody murder. Yet everybody wants the government to do something about housing, just not in their backyard. The only way for densification to be fair, and not result in one municipality seeing a sharper decline in housing prices than another, is for EVERYBODY to be compelled to change and have each municipality work out the finer details.
Alas, I am deeply pessimistic about change, in no small part because elected politicians are far more likely to be landlords than the general population putting them in a huge conflict of interest.
The WW2 level mobilization idea seems on point to me, but most Canadians I know seem totally oblivious to the fundamental decline of our economic and infrastructural capacities. I think we’ve lived too long in easy mode, benefitted a lot in many ways from our neighbour to the south, and let things slide too much for a generation or two.
I hesitate to say that in a sense because frankly, I don’t fully understand it. I do however understand that we’re languishing in many ways, and we don’t appear prepared to address this in a meaningful way.
It feels a bit like watching someone play a real time strategy game and noticing things are easy for them because external elements are removing difficulty from the game, so they focus their resources on a lot of the wrong stuff. Then when hard times come, they’re brutally unprepared and get wrecked while they try to ramp up to deal with whatever came for them. It feels like Canada is at the stage where the first taste of bad stuff has arrived, and we’re still fumbling with deciding what/if/how to address this bad thing. And we’d really like to continue playing the game as we were up until that point.
Maybe a terrible analogy. I’m the epitome of a layperson. All of this is opinion that should be taken with teaspoons of salt.
This is my own opinion too: I feel that as Canadians we are generally coasting on our past accomplishments/echoes of past economic activity. This blinds is to upcoming challenges and existing problems.
For example: we're ignoring the fact that our economy is heavily skewed towards "fake productive" activities like selling the same house back-and-forth to each other, and the Finance industry (an accountant friend tells me that even in Oil & Gas a lot of the "growth" happens through trading unproductive land stakes). The other heavyweight driver of activity is Government, but that can't be sustained if you're not generating value through other industries...
I also think that Canadians have a complacent attitude to daily corruption ("it couldn't happen here - that only happens in those funny tropical countries!"). This means that corruption flourishes just under the surface in many places.
I think the shortage of skilled construction labor is a huge problem in the US too. I have heard from general contractors and tradespeople that the trades have a big shortfall in the talent pipeline that is getting worse.
I can only imagine the situation is worse in Canada since the immigration system favors people with tertiary degrees.
We need to figure out how to incentivize people to choose skilled manual labor as a career. As it is the rewards don't compare with a career spent in an office even if the pay in the office is lower. That's because the office work is more pleasant and the career likely longer due to less wear and tear on the body.
Public safety employees (police and firefighters) have early retirements because their jobs are physically demanding. If we don't figure out a way to guarantee early retirements for people with physically demanding jobs in the private sector, young workers with options will continue to avoid them. And the houses that everyone knows we need most of all won't get built.
The apprenticeship model I'm the US is especially difficult. Why pay for electrician schooling, then struggle for three to five years earning $30k at best per year, when you can get more straight out of school in any white collar job?
I don't know what a better option would look like, but it is a deal breaker that some people I know personally had to wrestle with.
> We need to figure out how to incentivize people to choose skilled manual labor as a career.
You just did with the rest of your comment.
>As it is the rewards don't compare with a career spent in an office even if the pay in the office is lower. That's because the office work is more pleasant and the career likely longer due to less wear and tear on the body.
> can’t build in many directions because it’s ocean
UP! Why does everyone forget UP?! I’ve followed some of the projects proposed for development in Victoria (I am in the industry and lived on Salt Spring Island for a while), and the city has been as backward as any other city in the nation by making developers jump through hoops to get even a tiny modicum of density. The NIMBY population in Victoria is also among the most aggressive in the country.
>Canada has an ace in the hole here (that America doesn’t) in the form of a relatively generous immigration program.
>It’s time it leans on immigrants to bolster its entrepreneurship. Immigrants are by definition self-selected risk takers it’s a match made in heaven.
Yes, Confederation and Conestoga are just jam-packed with immigrant entrepreneurs. Why aren't they creating thousands of startups?
(Context for non-Canadians: Like the US, Canada allows international students to work. Unlike the US, Canada allows those students to work off campus. This has caused the rise of an entire industry, in which so-called institutions of higher learning (Conestoga, Lambton, Confederation) have 99% Indian "students" that work off campus, destroying the local job and housing markets.)
This has been debunked again and again[1]. Please stop. No ones complaining about unemployment/underemployment anymore and with good reason. Even the article OP posted cites a job market that is too good for entrepreneurs to take risks outside of it. Let’s just set this one aside.
The housing market and other inflation is mostly an artificial own goal on the governments part. Demand is a good thing in markets that aren’t artificially constrained.
The blog post you've linked is titled "Why immigration doesn't reduce wages", which I think is an absurd claim to make. The author seems more interested in owning "anti-immigration people" than actually proving that thesis. Citing a handful of studies does not conclusively prove that immigration is never and can never have negative effects.
The article also does not seem relevant to Canada whatsoever. You don't think that the massive lines for a handful of minimum wage job postings are in any way impacting local job markets? Does Tim Hortons abusing the TFW program help or harm the local job market?
The Canadian economy is a ponzi-scheme dependant on bringing in an accelerating number of immigrants every year and saddling them with debt.
The demographics suggest that they need young people to work many minimum wage jobs. Indeed these holes are filled by Indian and other immigrants like myself who live well below median Canadian lifestyles (e.g. 5 people sharing a 2 bedroom house). The tricky question is whether this is a net positive for Canada or not. My guess is the answer is not that simple or straightforward.
It is laughable that a country with as much land as Canada or Australia have housing issues.
Essentially it is the class that owns houses which restrict new supply under the guise of environmentalism or whatever they can find to enforce NIMBYism. The rents extracted from new immigrants are crazy high.
> It is laughable that a country with as much land as Canada or Australia have housing issues.
While true, I think it's important not to conflate "land" with "land people actually want to live in". Most land is cold and inhospitable. Perhaps people would have gladly moved to North Ontario in exchange for a parcel of land in the past, but nowadays everyone wants to be in Vancouver or the GTA.
It's not that having a working population is necessarily a bad thing, it's that student visas are a known immigration loophole which result in hundreds of thousands of "students" (economic migrants) that wouldn't have qualified otherwise. Many of them are also willing to work and live in terrible conditions[0][1], which affects jobs and housing.
Anecdotally, I know of several people that started working full time (30+ hours) doing things like driving trucks within their first year.
Canada has an ace in the hole here (that America doesn’t) in the form of a relatively generous immigration program.
It’s time it leans on immigrants to bolster its entrepreneurship. Immigrants are by definition self-selected risk takers it’s a match made in heaven. However to fix it Canada needs:
a) less regulations on work requirements for immigrants (it’s less complicated than America but that’s not saying much)
b) better funding environment (I’m not a funder/investor so not qualified to speak to this, but I know it sucks)
c) housing, housing and lots of cheap housing especially, in the big cities and college towns where most budding entrepreneurs build the networks required to succeed.
Without c) esp Canada is DOA. But that’s a whole other post.