For decades, New Brunswick’ s population growth remained stable, if not stagnant. Between 1997 and 2006, for example, the province lost more inhabitants each year (except two) than it gained. Since the late-2010s however, that’s all changed.

The provincial population grew by almost 5,000 people in 2018—a first since 1990. This growth accelerated every year since (barring the 2020 lockdown year), beating its previous record of 14,020 (set in 1975) in 2021. In 2022, the population grew by 26,229, roughly equivalent to the population of Dieppe. In fact, New Brunswick saw more population growth in 2021 and 2022 then in the previous 29 years combined.

In the right circumstances, this influx can benefit New Brunswick’s economy while revitalizing many communities previously in decline. But an exploding population coupled with low rates of homebuilding threaten to seriously warp the supply and demand equation in the province, and many New Brunswickers now worry about housing affordability.

And they’re right to worry. According to a new study published by the Fraser Institute, the problem isn’t simply that New Brunswick’s rate of homebuilding has failed to keep pace with population growth, but that homebuilding has actually declined, eroding New Brunswickers’ prospects of finding housing that meets their needs and budgets.

Like most of Canada, New Brunswick reached its homebuilding heyday in the 1970s. During this period, builders in the province typically built more than 5,000 homes per year, easily keeping pace with population growth, which averaged just under 6,000 people per year (at the time, the average household across Canada housed approximately three people). In the decades that followed, both homebuilding and population growth fell. However, population growth fell even lower, meaning that homebuilding routinely outpaced population growth throughout the 1990s and 2000s. In other words, more homes were built than there were people to live in them, helping keep the cost of buying and renting low relative to other parts of Canada.

Since then, homebuilding has remained near historic lows, averaging between 2,000 and 3,000 homes built per year throughout the 2010s. But population growth has reached historically unprecedented levels, meaning the gap between supply (the number of homes built) and demand (population growth) has widened significantly. Not surprisingly, this gap broadly coincides with a dramatic increase in housing prices as more buyers seek roughly the same number of new homes.

Put differently, in most years between 1972 and 2022, New Brunswick grew by one to two people per new home built the previous year. Specifically, the province added 1.1 additional people for every home built per year (on average) over this period. In 2022, however, this number skyrocketed to 11.3 people per home built. This is not just a record for New Brunswick, but for all of Canada. (Historically, only Prince Edward Island, where smaller numbers can skew results, posted a higher ratio back in 1983.)

It will not have escaped New Brunswickers that home prices and rents Canada-wide have become severely unaffordable for most Canadians. It’s therefore sobering to ponder their own province’s housing supply and demand dynamics. The chronic shortage of homes that has long afflicted larger urban centres in other parts of the country has not only arrived to New Brunswick, but appears set to reach new stratospheric proportions.

To be sure, the Higgs government has taken some steps to address the problem. In June, it released a housing strategy, which explicitly seeks to increase the number of housing starts, among other measures. However, to reverse these alarming trends, New Brunswick policymakers must act big and act fast. Next door, Nova Scotia’s government is grappling with a similarly large housing gap and has taken bold action to close it. Unlike Ontario, which is banking on local governments responding to recent legislative changes, Nova Scotia has cut out the middle man by directly approving the development of more than 22,000 homes across 10 “special planning areas.” And it also recently proposed to take a more prominent role in all permitting in the Halifax Regional Municipality—Atlantic Canada’s largest urban area. Such moves will undoubtedly ruffle some feathers, especially regarding local autonomy, but given the magnitude of the housing gap no solution can work without significant trade-offs.

Years of stagnation on homebuilding and an influx of new residents from other parts of Canada and the world has produced New Brunswick’s large imbalance between supply and demand. The province doesn’t just need to match previous rates of homebuilding attained 50 years ago, but it must double or triple those rates if it wants to return any semblance of balance to its housing market. As daunting as this challenge may seem, far more daunting are the consequences of inaction.