Toronto, Montreal see exodus pick up pace, aggravated by COVID-19 pandemic

Open this photo in gallery:

More and more people are fleeing Toronto and Montreal for nearby regions, a long-standing trend tied to worsening home affordability and aggravated by the pandemic.

Over a 12-month period ending July 1, 2020, and overlapping with the first wave of the pandemic, the metropolitan area of Toronto saw a net intraprovincial outflow of 50,375 people, according to Statistics Canada figures released Thursday. That means 50,375 more people left the Toronto area for other parts of Ontario than moved in – a record high according to data going back almost two decades.

The outflow was also acute in the Montreal area, which saw a net intraprovincial loss of almost 25,000 people – another record high, about 11,000 more than the previous year. Montreal was hit especially hard by COVID-19 in the spring.

Both census metropolitan areas (CMAs) saw their populations continue to grow, though, owing mainly to international migration.

“Personal health, the ability to work remotely and higher housing costs are among the most important factors contributing to the decision of many Canadians to continue (or to no longer continue) living in large urban centres hardest hit by the pandemic,” Statscan said.

The agency did not say how much of the exodus occurred after the health crisis began. However, the numbers appear to confirm the anecdotal evidence: Thousands of Canadians have reacted to the pandemic by moving to smaller cities and towns.

The migration is a complicated trend. It has added dynamism and tax revenue to smaller locales. But it has also driven up housing costs in places that were once immune to big-city prices, creating a barrier to home ownership for locals.

“You’re seeing more rural areas shift into high demand” for housing, said Royal Bank of Canada chief executive officer Dave McKay at a virtual conference Monday.

At the same event, Bank of Nova Scotia CEO Brian Porter said the bank’s mortgage business grew 5.5 per cent last year, with even stronger growth to start 2021. “It’s broad-based across the country,” he said, pointing to such hotspots as Penticton, B.C., Brandon, Man., and Moncton, N.B.

The exodus from Toronto was apparent in places such as nearby Oshawa, where the population rose 2.1 per cent over the 12 months ending mid-2020, the fastest growth in the country for a census metropolitan area, defined as an area with a total population of at least 100,000, of which 50,000 or more live in the core. The increase, Statscan said, was partly driven by migration from Toronto, whereas the population increases of the municipalities of Farnham (5.2 per cent) and Saint-Hippolyte (4.1 per cent) in Quebec were influenced by the outflow of people from Montreal.

Treat Hull, a real estate broker in Ontario’s Prince Edward County, has seen the pandemic impact up close. Located about 200 kilometres east of Toronto, the county already had a competitive real estate market. But the health crisis kicked activity into overdrive, with monthly sales volumes in 2020 often double those of an already strong 2019.

“It’s been an insane year,” Mr. Hull said. “I wouldn’t go so far as to call it panic-buying, but let’s just say it’s mainly been buyers from Toronto – and many of them have an acute sense of urgency about wanting to get out of Toronto.”

The big change in demand, he observed, stems from two-adult households with both people suddenly able to work remotely, allowing them to look further afield for housing.

Indeed, labour figures show a massive rise in remote work. As of December, roughly 4.8 million Canadians worked from home – a new situation for 2.8 million of them. The majority of workers in three white-collar industries – professional and scientific services, finance and insurance, and public administration – worked from home.

Despite the departures, Canada’s big cities continue to expand. That’s because other components of population change – notably, international migration – played a big role. CMAs grew 1.3 per cent over all in the most recent year, less than in the previous year (1.7 per cent), but still more than non-CMA regions (0.6 per cent). The Toronto and Montreal areas grew 1.4 per cent and 0.7 per cent, respectively.

While immigration has plummeted because of the pandemic, international migration still accounted for 90 per cent of the population growth in Canada’s CMAs.

The coming year should see continuing migration out of Toronto and other major cities. The average selling price of a home in the Greater Toronto Area last year was a record $930,000 – partly because of historically cheap mortgage rates.

The flipside is smaller communities are increasingly under pressure. Mr. Hull said there’s little inventory of home listings in Prince Edward County at the moment, making it challenging for some locals to become homeowners.

“The influx of often highly successful and accomplished mid-career professionals and knowledge workers is definitely having an impact on the community,” he said. “We already have a critical shortage of affordable housing to begin with.”

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.