Ontario’s soaring house prices, increased teleworking and less stringent lockdowns in some other provinces have contributed to Ontarians moving to other provinces and territories at a rate not seen in four decades, a recent Scotiabank report shows.
In 2021, roughly 108,000 people left Canada’s largest province, the highest four-quarter out-migration since 1981, and a sharp reversal of pre-pandemic trends, Statistics Canada’s Population Estimates, Quarterly notes.
While the loss was more than compensated by the arrival of 198,500 immigrants, such a large movement to other provinces merits an examination, says Marc Desormeaux, Senior Economist at Scotiabank in his report last week on the population data.
Desormeaux noted that unlike past interprovincial migrations the outflow cannot be explained by relative regional employment prospects. Instead, the Scotiabank Economics report points to increased telework since the start of the COVID-19 pandemic, less stringent lockdowns elsewhere in the country and Ontario’s soaring house prices as motivations for Ontarians to move to other regions of the country.
He notes that past migrations out of the province primarily reflected regional differences in economic growth and job prospects, citing the migrations of the oil boom years of 1980 and early 1981 and of the last commodity price super cycle that peaked in the early 2010s when Ontarians moved to Alberta and Saskatchewan.
“Historically, movement within the country has had a strong correlation with oil prices. When crude surges, jobseekers tend to migrate to net oil-producing provinces like Saskatchewan and Alberta,” Desormeaux said.
Last year, with COVID-19 still spreading and strict containment measures still in place, the Maritime provinces witnessed record inflows from Ontario, while BC welcomed more Ontarians than at any point since the early 1990s recession. Surprisingly, even Quebec had more Ontarians move there than vice versa, for the first time ever. Late in the year, Alberta also saw an influx from Ontario, a trend that should continue thanks to high oil prices hovering around $100 USD a barrel and drilling activity on the rise.
Desormeaux suggests a couple of reasons for these moves:
Differences in lockdown stringency. BC and the Maritime provinces, for the most part, imposed less restrictive measures to contain COVID-19 than Ontario did. That, of course, doesn’t explain why Quebec, which implemented some of the earliest and toughest restrictions during multiple pandemic waves, saw a greater number of people moving there from Ontario.
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Housing affordability. Toronto recently surpassed Vancouver as Canada’s priciest housing market, with average Ontario home sale prices as a share of disposable income roughly in line with those in BC for the first time since before the early 1990s recession. (See graph above.)
Increased telework. With remote work accepted in many sectors of the Canadian labour market, some Ontario workers sought opportunities in more affordable locations.
Historical migration ties. Nova Scotia and New Brunswick far outpace Manitoba and Saskatchewan as a choice for Ontario residents, despite the latter having much larger economies, clear advantages on affordability and relatively light pandemic restrictions. This likely can be explained by historical migrations.
While telework and housing affordability challenges will likely persist and surging crude values will make Alberta and other net oil-producing provinces more attractive to job seekers, Desormeaux said Ontario isn’t without its draws. The province’s cultural diversity, large and diversified economy, and wages above the national average, as well as its capital city Toronto being a major financial services and technology sector hub are attractive to newcomers and people from across the country.
Read the full report here.
