New houses are under construction in a new residential district in Brantford Ontario Canada on a sunny day. (Photo credit: iStock Photo)
April 8, 2024
By Mike Moffatt
In April 2024, the Smart Prosperity Institute published the piece,Ontario's Need for 1.7 Million More Homes, describing how Ontario will need to build 1.7 million homes from July 1, 2021, to June 30, 2031, to keep pace with population growth and a pre-existing housing shortage. Our Ontario estimate raises the obvious question: How many homes will the other provinces and territories need to build
Let's answer that question by using the RoCA Benchmark.
In our 2022 paper, Ontario's Need for 1.5 Million More Homes, we developed the RoCA Benchmark, a method of converting population by age totals into a number of households (thereby creating a crude measure of housing demand). The RoCA Benchmark is defined as follows.1
RoCA Benchmark Number of Households (Definition): The number of households a community would have, given the size of their population if their age-adjusted headship rates were equal to the 2016 "Rest-of-Canada" average, where the rest of Canada excludes Ontario and British Columbia.
Figure 1 provides the parameters to convert population data into the number of RoCA Benchmark Households. For example, for every 1,000 persons between the ages of 25 and 34 added to a population, the RoCA Benchmark number of households increases by 467.
| Age Group | RoCA Household Formations Per 1,000 Persons | Age Group | RoCA Household Formations Per 1,000 Persons | Age Group | RoCA Household Formations Per 1,000 Persons |
| 0-14 | 0 | 35-44 | 549 | 65-74 | 615 |
| 15-24 | 120 | 45-54 | 579 | 75-84 | 619 |
| 25-34 | 467 | 55-64 | 593 | 85+ | 480 |
With those parameters, we must perform two calculations:
Plugging population and housing figures from the 2021 Census into the RoCA Benchmark, we find that seven provinces and two territories had pre-existing housing shortages (that is, the number of occupied homes was lower than the RoCA Benchmark estimated number of households). Outside of Ontario, British Columbia, and Alberta, shortages were relatively modest according to the RoCA framework. Figure 2 shows that the seven provinces and two territories with shortages had a combined pre-existing housing shortage of nearly 700,000 units.
| Province | Pre-Existing Shortage (as of 2021) |
| Newfoundland and Labrador | 5,812 |
| Prince Edward Island | 830 |
| Nova Scotia | 0 |
| New Brunswick | 3,331 |
| Quebec | 0 |
| Ontario | 471,267 |
| Manitoba | 15,139 |
| Saskatchewan | 0 |
| Alberta | 72,902 |
| British Columbia | 121,220 |
| Yukon | 0 |
| Northwest Territories | 428 |
| Nunavut | 974 |
| TOTAL | 691,903 |
Our latest report, Ontario's Need for 1.7 Million More Homes, uses Ontario Ministry of Finance population projections to forecast the number of RoCA household formations between 2021 and 2031. Unfortunately, these population projections only cover Ontario, so they cannot be used for Canada-wide projections.
Statistics Canada releases population projections by age; however, their latest release was on August 22nd, 2022. Given the spike in population growth over the past two years, these have become dated, and their "reference" scenario is quite low. However, their high-growth (HG) scenario projects that Canada's population will grow to 44.7 million persons by July 1, 2031. Given that Canada's population was 40.7 million persons at the beginning of 2024, this would suggest our population will grow by approximately 530,000 persons a year over the next 7.5 years. Given recent reforms to non-permanent resident programs, this is a reasonable estimate of annual population growth from now to 2031.
Using the HG scenario, we find that Canada will need to add 2.8 million homes due to projected 2021-31 population growth. Add this to the pre-existing shortage of almost 700,000 units, and Canada should add nearly 3.5 million homes between 2021 and 2031, as shown in Figure 3.
| Province | Projected Household Formations (2021-31) | Pre-Existing Shortage (as of 2021) |
Total Estimated Housing Needs (2021-31) |
| Newfoundland and Labrador | 5,723 | 5,812 | 11,536 |
| Prince Edward Island | 14,093 | 830 | 14,923 |
| Nova Scotia | 54,057 | 0 | 54,057 |
| New Brunswick | 31,420 | 3,331 | 34,751 |
| Quebec | 325,855 | 0 | 325,855 |
| Ontario | 1,237,117 | 471,267 | 1,708,384 |
| Manitoba | 90,826 | 15,139 | 105,965 |
| Saskatchewan | 81,164 | 0 | 81,164 |
| Alberta | 476,641 | 72,902 | 549,544 |
| British Columbia | 481,091 | 121,220 | 602,311 |
| Yukon | 3,539 | 0 | 3,539 |
| Northwest Territories | 2,191 | 428 | 2,619 |
| Nunavut | 1,824 | 974 | 2,798 |
| TOTAL | 2,805,541 | 691,903 | 3,497,444 |
Despite using a different set of population projections, we once again find that Ontario will need to build 1.7 million homes from 2021 to 2031 to keep up with population growth and to cover the existing shortfall.
Note that these figures are lower than the 5.1 million homes that Canada will need to build between 2022 and 2030 according to the CMHC states report, Housing shortages in Canada: Updating how much housing we need by 2030. The biggest difference between the two estimates is in Quebec, where we estimate rather modest housing needs due to slow population growth. Similarly, we predict greater housing needs in Alberta, a province that is experiencing rapid population growth. Figure 4 shows the difference between the two sets of estimates, with our estimates being rounded to the nearest thousand (the CMHC paper rounds their estimates to the nearest ten thousand).
| Province | Our Estimates (2021-31) | CMHC Estimate | Difference |
| Newfoundland and Labrador | 12,000 | 60,000 | 48,000 |
| Prince Edward Island | 15,000 | 0 | -15,000 |
| Nova Scotia | 54,000 | 100,000 | 46,000 |
| New Brunswick | 35,000 | 20,000 | -15,000 |
| Quebec | 326,000 | 1,190,000 | 864,000 |
| Ontario | 1,708,000 | 2,060,000 | 352,000 |
| Manitoba | 106,000 | 240,000 | 134,000 |
| Saskatchewan | 81,000 | 90,000 | 9,000 |
| Alberta | 550,000 | 410,000 | -140,000 |
| British Columbia | 602,000 | 930,000 | 328,000 |
| Yukon | 4,000 | 0 | -4,000 |
| Northwest Territories | 3,000 | 0 | -3,000 |
| Nunavut | 3,000 | 0 | -3,000 |
| 3,499,000 | 5,100,000 | 1,601,000 |
None of this should be taken to suggest that our estimates are right and the CMHC’s are wrong. Rather, it should be taken to indicate that different methodologies for estimating housing shortages will produce differing results.
We will update our estimates when Statistics Canada releases updated population forecasts. Until then, our best estimate is that Canada will need to build 3.5 million homes between 2021 and 2031, 1.6 million fewer than estimated by the CMHC.
1 Ontario’s Need for 1.5 Million More Homes provides a more detailed explanation of the RoCA Benchmark method.
Executive in Residence
©2024 Smart Prosperity Institute. All rights reserved.
Contact us:
info@smartprosperity.ca | 1 Stewart St (3rd Floor), Ottawa, ON, K1N 6N5