Measuring Immigration’s Impact on Municipalities

Higher immigration does not always mean strained capacity

Municipalities with similar immigration rates can experience different outcomes. For example, the municipalities of Victoria and Langford in British Columbia both have an immigration rate of 4 per cent, but Victoria is under capacity, while nearby Langford has a strained capacity. The difference depends on underlying economic conditions, housing supply, service infrastructure, and transit systems.

There is no single threshold at which immigration-driven population growth strains the capacity of local systems.¹ Pressures emerge differently across places depending on whether the provision of housing, job opportunities, access to public transit, and access to quality health and education services can keep pace with population growth.²

Municipalities with the highest immigration rates also show divergent results. In Ontario, Toronto is rated balanced capacity with an immigration rate of about 7 per cent, while Mississauga, Brampton, and Oakville are classified as strained capacity with similar rates of immigration.

These examples reinforce that immigration levels alone do not determine whether a municipality experiences strained capacity, balanced, or under capacity—what matters is how immigration aligns with local capacity.

Most municipalities have strained capacity

Sixty-four per cent of municipalities (n = 142) are rated strained capacity, with overall ACI scores below 50. These municipalities show signs that immigration is more often associated with pressure on local systems, suggesting that current capacity may be less able to accommodate rapid population growth. Examples of municipalities with this rating are Sault Ste. Marie (Ontario), Sherbrooke (Quebec), Langley (British Columbia), and Edmonton (Alberta).

This finding should not be interpreted as a national limit on immigration or as evidence that immigration is the sole cause of local pressures. The ACI identifies municipalities where immigration is associated with strain relative to the other municipalities studied. This pattern is consistent with prior research, which has highlighted housing, healthcare, and infrastructure pressures as signs that absorptive capacity can be compromised when population growth outpaces service expansion.³ Depending on local objectives, the appropriate response may include increasing capacity, better coordinating population and infrastructure planning, changing the distribution or pace of growth, or examining the issue in greater detail using local data.

At the same time, a good number of municipalities appear to have additional room to adapt. Thirty-three per cent of municipalities (n = 74) are under capacity—scoring greater than 50. Examples of municipalities with this rating are Delson (Quebec), East St. Paul (Manitoba), North Saanich (British Columbia), and Rothesay (New Brunswick). In these places, immigration is more often associated with manageable or favourable outcomes across the five dimensions, suggesting that the current infrastructure is better positioned to accommodate higher levels of immigration-driven growth.

Only a small share of municipalities falls in the middle of the distribution. Just 3 per cent of municipalities (n = 6) were rated balanced capacity—meaning that immigration appears broadly aligned with local capacity at current levels. These municipalities are not necessarily free of pressure, but they appear more closely calibrated to the scale of immigration-driven population growth they are currently experiencing. The municipalities with this rating are Surrey (British Columbia), Saint-Jérôme (Quebec), Drummondville (Quebec), Gatineau (Ottawa), Toronto (Ontario), and Abbotsford (British Columbia).

Immigration rates alone do not explain why some municipalities have strained capacity while others do not. The trendline in Chart 1 shows no meaningful relationship between municipalities’ immigration rate and ACI score. Municipalities with higher immigration rates are no more likely to have stronger or weaker capacity than municipalities with similar immigration rates. Many municipalities with similar immigration rates fall into different capacity categories, reinforcing that immigration levels are not a determinant of local capacity.

Capacity strain occurs even at very low immigration levels

In municipalities with strained capacity, even small inflows of immigrants can aggravate existing pressures, particularly where housing supply is limited or labour markets are weak.

This pattern explains why some municipalities struggle to accommodate even low immigration rates, while others remain more resilient. For example, King, Port Colborne, Pelham, and Wilmot in Ontario are all classified as strained despite immigration rates of under 1 per cent.

Other smaller municipalities remain resilient at similarly low levels of immigration: Saint‑Jérôme and Delson in Quebec are balanced and under capacity, respectively, also with immigration rates of just 1 per cent.

Municipality size affects capacity constraints

Larger municipalities tend to face fewer binding capacity constraints than smaller ones. Eight per cent of large municipalities (n = 4) have a balanced capacity rating, more than medium-sized (3 per cent, n = 2) and small-sized municipalities (0 per cent). Large municipalities tend to have broader labour market opportunities, more established immigrant networks (e.g., family, friends, and co‑ethnic communities), and a wider range of services and infrastructure that support integration. These features can make larger municipalities better able to adjust to immigration-driven population growth without tipping into strained capacity.

By contrast, small and medium‑sized municipalities typically operate closer to fixed capacity constraints, where small changes in population can stretch the municipality’s existing service infrastructure and create competition for the limited number of jobs and housing options. These municipalities may also have fewer social structures that new immigrants tend to rely on in their first few years in Canada, such as established immigrant communities, informal networks, and specialized settlement services.⁵

However, smaller-sized communities do not automatically imply strained capacity. We find substantial variation across municipalities that might otherwise be considered alike (see Chart 2) depending on the interaction between immigration levels and local conditions. Some smaller municipalities may have room to accommodate more immigration, while others may require targeted investment in affordable housing, primary care services, settlement and employment supports, and transportation.⁶