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The Toronto region grew by 2.1 per cent, or more than 138,000 people, over the year ending July 1, 2022.Adetona omokanye/The Globe and Mail

Canada’s urban areas recently experienced their strongest population growth in at least two decades, after a weak expansion during the early stages of the pandemic.

Over the year ending July 1, 2022, the country’s census metropolitan areas (CMAs) grew 2.1 per cent – about 574,000 people – according to Statistics Canada estimates published Wednesday. That was the strongest pace of annual growth since the agency began publishing such figures in 2001.

It was a comeback of sorts for urban regions, which had grown just 0.5 per cent the previous year, lagging the growth in rural areas. The pandemic and its accompanying border restrictions led to a dramatic decline in immigration to Canada, while many urban residents decamped to smaller communities.

Immigration to Canada hits record high in 2022

But as restrictions eased, immigration surged to record levels, helping drive most of the population increase in urban areas. Sixteen CMAs notched their strongest annual growth on record.

At the same time, some major cities are still seeing plenty of residents leave. The Toronto region, for one, is losing significantly more people to other parts of Canada than it is bringing in. Over the past year, its population growth was entirely driven by international migration, which includes permanent residents and foreign students.

Several economists tie the exodus to worsening home affordability, along with the rise of remote work. And as homes have gotten pricier in suburbs and exurbs, buyers are looking even further afield.

“This is not like 50 years ago, when people were leaving downtown Toronto and moving to Etobicoke,” said Mike Moffatt, the founding director of the PLACE Centre think tank, referring to the former suburb that is now part of the city of Toronto. “This is people moving to London or Moncton or basically outside of the economic region. So there is a fundamental difference.”

Indeed, Atlantic Canada is experiencing a boom. Moncton’s population rose 5.4 per cent over the year ending July 1, 2022, the most of any CMA. Halifax was the next highest, at 4.5 per cent. Charlottetown grew 4.2 per cent.

There was breadth to the expansion, too. The Calgary area grew 3.2 per cent, or roughly 50,000 people, its strongest pace since the mid-2000s. The Vancouver area added 2.8 per cent to its population. The populations of Barrie and London, Ont., rose 3.2 per cent and 3 per cent, respectively.

The Toronto region did grow – by 2.1 per cent, or more than 138,000 people. However, it saw a net intraprovincial loss of roughly 78,000 – which means that many more people left for other parts of Ontario than moved in. It was the most on record, and the outflow has accelerated in recent years, alongside rising home prices and rents. There has been a spike in the number of children leaving the city, suggesting that young families are getting priced out of the housing market and are looking elsewhere for properties.

The Montreal and Vancouver areas also saw net intraprovincial losses of about 29,500 and 14,300 people, respectively, over the past year. Over all, Montreal’s population grew just 0.9 per cent, outpacing only Thunder Bay (0.2 per cent) among CMAs.

Toronto is also losing people to other provinces. The region saw a net interprovincial outflow of roughly 21,400 residents, more than double the previous record for departures.

Mr. Moffatt said the concern is that cities such as Toronto will suffer a “hollowing out” of their middle classes, who can no longer afford to live there. This has implications for the labour market, he said, as many crucial workers – such as teachers and nurses – are forced to relocate.

“You basically have two extremes, where fairly wealthy and older households can make it work, then you have young students and people starting their careers who are sharing apartments,” he said.

On the flip side, the Calgary area swung to a net interprovincial gain of residents in what amounted to the largest inflow of people since the oil price collapse of 2014 to 2016.

Similarly, Halifax is drawing large numbers of people from outside Nova Scotia. The CMA notched a net interprovincial inflow of more than 8,000 people, a figure that has been rising steadily for years.

Brigitte Teleu, a local real estate agent, said upward of 30 per cent of her clients recently have been out-of-province buyers. Like much of the Maritimes, Halifax saw home prices surge during the boom period of 2020 and 2021.

“Our prices are still relatively low, even now, compared to the rest of Canada,” she said. “A lot of people are selling their homes in Toronto, and they have all the money to spare and they just buy a house upfront in cash.”

Canada is struggling to build enough homes for its rapidly growing population, especially with higher interest rates, which make construction costlier and qualifying for a mortgage even more difficult. The federal government, meanwhile, is pursuing record levels of immigration in the coming years, adding more demand for homes in short supply.

“I think we’re going to have an escalation of the current trends, where our cities are growing but at the same time we are losing a lot of young professionals to Alberta and Atlantic Canada” from Ontario, Mr. Moffatt said.

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