Immigrants, Asset-Based Welfare, and the Geography of Debt in Canada's Global Cities

An urbanized nation with a reputation for welcoming high levels of immigration, as well as for escaping the worst of the global financial crisis with no banking crisis, Canada has also received international attention for high... [ view full abstract ]

An urbanized nation with a reputation for welcoming high levels of immigration, as well as for escaping the worst of the global financial crisis with no banking crisis, Canada has also received international attention for high housing prices and high levels of household debt, particularly in its global cities. To the degree these issues have been linked in the scholarly literature, thus far it is mostly in relation to potential housing demand from wealthy foreign investors in pushing up real estate values in key cities. What has not yet received sufficient attention are the high levels of debt among recent immigrants to Canada, and the potential effects of federal government policies and programs in encouraging new immigrants to take out disproportionately large mortgages to access owner-occupied housing. Justified by proponents of asset-based welfare, homeownership is purported to be crucial for immigrant integration and economic mobility, and yet, literature linking the socio-spatial dynamics of immigrant debt to asset-based welfare policies and the creation of citizen subjectivities remains scarce. This paper investigates questions related to these issues in Canada’s three global cities, Toronto, Montreal and Vancouver, using custom data aggregated at the neighbourhood scale. The results point to an interaction effect between federal policies encouraging homeownership, housing cost, and immigrant debt levels, with many neighbourhoods concentrating immigrants displaying significantly higher levels of mortgage debt than other neighbourhoods, even as they have relatively lower average housing costs. These effects are dependent upon metropolitan house prices, and exacerbated by inner-city gentrification and declining levels of social and affordable market rental housing. We argue that one reason Canada’s economy remained buoyant and avoided a banking crisis is by welcoming large numbers of new immigrants who have then paid a larger proportion of their incomes in the form of debt payments to Canadian financial institutions.