The latest round of interest rate hikes in Canada is likely to send the costs of rent and housing even higher, and as people battle with affordability, large cities could very well feel an economic blow, economists say.
In this environment, economists are arguing that high shelter costs, such as soaring rent, will push workers out of large Canadian cities and slow the country’s future economic success.
Not every company can afford to pay people top wages to live in metropolitan areas like Vancouver and Toronto, and so, the normal start-up business model becomes less likely to attract and foster talent in these cities, potentially harming innovation, he explained. There’s also the reality that immigrants will turn away from Canada amid the heightened cost of living, he cautioned.
The trend of people leaving large Canadian cities is already being seen in interprovincial migration data, Charles St-Arnaud, chief economist at Alberta Central, told BNNBloomberg.ca in a phone interview on Thursday.
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