Why Are Immigrants Moving to Smaller Cities in Canada?

When Maria arrived in Toronto with her young family, she imagined a city full of opportunity. She didn't expect rent to eat half her monthly income — or that saving for a down payment would take over a decade. Well, Maria’s not alone!

The Toronto Real Estate Board reports that Toronto's average home price declined 7.2% year over year to $1,054,372 in October 2025. Moreover, the Greater Vancouver REALTORS showed a benchmark price of $1,142,100 in September 2025. Montreal's derived average (sales volume divided by sales) sits at $676,778 for September 2025.

For you and countless other newcomers, soaring housing costs are turning the traditional "big city" dream into a financial challenge. So the question is:

“Is settling in Canada's major urban centers still worth it or is the new Canadian dream shifting toward smaller, more affordable cities?”

We'll explore three dimensions reshaping where you might settle:

• Housing affordability as the dominant factor
• Employment opportunities in mid-sized cities
• Community support and quality of life

Why is housing affordability your biggest challenge?

Settlement in Canada's three largest Census Metropolitan Areas Toronto, Vancouver, and Montreal has historically been driven by strong job markets and established social networks.

However, these patterns have created a perfect storm soaring housing demand + constrained supply have resulted in an acute affordability crisis (not exactly the warm welcome anyone hopes for).

Price differences

The gap in housing costs is the primary catalyst for shifting settlement patterns. Table 1 shows the substantial financial difference between Canada's major and secondary markets although the data come from multiple sources and time periods, which limits direct comparability.

Housing prices and rents across Canadian cities

Sources: WOWA, TenantPay, Apartments.com, Nesto, NSRealtors, Classifieds Calgary, Statistics Canada, CityNews Halifax, Reviewlution

Average home prices in cities like Vancouver (~$1.28 million) are three times higher than in Edmonton or Winnipeg. Moreover, rent for a one-bedroom apartment in major cities is often 50% to 70% more than in mid-sized cities.

The affordability gap worsens when income is taken into account. Statistics Canada reports the median entry wage for recent immigrants (one year after landing) was approximately $42,900 in 2022. For you to earn this median wage, dedicating the recommended 30% of gross income to rent would amount to approximately $1,072 per month.

In major centers like Vancouver and Toronto, where typical one-bedroom rents often approach or exceed $2,500, you face severe rental overburden, spending 40-50% or more of income on shelter. Alternatively, you must accept crowded, substandard, and often insecure living arrangements.

Impact

High housing costs extend far beyond budgetary constraints. For you as a new immigrant, housing instability is a foundational barrier with ripple effects throughout your settlement journey.

Delayed integration happens when you can't save for a down payment or even afford an appropriately sized rental unit. Financial insecurity directly impedes your ability to establish roots and start a family in Canada.

Moreover, the constant pressure of housing competition, soaring rent inflation, and the difficulty of securing a first lease without Canadian credit history can lead to significant stress and prolonged anxiety (not to mention the mental toll of starting fresh in a new country while worrying about keeping a roof overhead).

Unstable or distant housing forces long, expensive commutes exhausting you and detracting from your ability to focus on:

• Job searching
• Language training
• Building professional networks

A 2024 survey by the Angus Reid Institute found that 39% of people who have lived in Canada for less than a decade are actively considering leaving their province due to housing affordability. Some contemplate leaving Canada altogether.

How are settlement patterns changing?

Your decision of where to establish life sits at the intersection of economic opportunity, social support, and (increasingly) housing viability.

Canadian immigration has long centered on metropolitan hubs, but the pressures mentioned above have created a measurable shift decentralizing immigrant populations across the country.

Historical concentration

Canadian immigration policy and economic reality fostered a profound concentration of newcomers in three major Census Metropolitan Areas. For decades, the "Big Three" Toronto, Vancouver, and Montreal have acted as settlement magnets for several compelling reasons:

• Deep, mature cultural and ethnic networks
• Access to the largest and most diversified economies
• Robust settlement services with language training

As recently as 2016, approximately 56% of all recent immigrants (those who landed within the last five years) chose to settle in one of these three cities, according to Statistics Canada. Enduring concentration has fueled rapid demographic growth but has also contributed to current housing pressures.

Recent shifts

The most recent census data confirms that deep concentration is beginning to decline.

The percentage of recent immigrants choosing the Big Three CMAs fell from 56.0% in 2016 to 53.4% in 2021, a significant 2.6 percentage-point drop over just five years.

Movement represents an active redistribution of immigrant populations toward mid-sized cities and non-traditional destinations. Declining concentration directly correlates with a surge in immigrant settlement in smaller, high-growth urban centers:

Alberta and Manitoba experienced gains Nova Scotia's share grew from 0.6% to 1.6% (2006 to 2021) Ottawa-Gatineau's share grew from 3.1% to 4.4% (2016 to 2021) New Brunswick's share increased from 0.4% to 1.2% (2006 to 2021)

Current preferences

Data from a recent social media poll conducted by RemitBee provides a timely glimpse into your current settlement preferences, reinforcing the central dilemma posed by Canada's housing crisis (though results should be interpreted as directional insights rather than rigorous statistical data).

Despite the acknowledged housing crisis, a majority of immigrants still express an initial preference for traditional settlement magnets likely due to established job markets and social networks.

Major cities such as Toronto, Vancouver, and Montreal were preferred by 67% of respondents, whereas mid-sized cities such as Halifax, Winnipeg, and Calgary were preferred by 33%.

When you're choosing a place to live in Canada, priorities cited by respondents clearly reflect challenges of the current economic climate:

Affordability Job opportunities Lifestyle amenities

The trade-off

The most significant finding concerns your willingness to sacrifice job options for housing stability. Housing affordability is now the dominant factor in your decision-making.

When asked, "Would you move to a smaller city if it meant better housing opportunities, but fewer job options?" the results indicated a clear prioritization of housing security over immediate career ambition.

RemitBee poll results

While two-thirds of immigrants initially prefer a major city, nine out of ten are either willing (60%) or conditionally willing (30%) to trade big-city job density for better housing. This confirms that affordability is the critical lever driving new settlement patterns away from major urban centers.

Change drivers

Your dispersion is not random, it's driven by three primary factors working in tandem.

Housing affordability creates a strong push factor. Expensive rental and ownership costs in Toronto and Vancouver make these cities increasingly inaccessible.

Smaller cities, by contrast, offer lower barriers to entry and higher rates of affordable housing, giving you a critical head start toward financial stability (which matters more than prestige when you're building a new life).

Government incentives create a pull factor. Federal and provincial governments have actively implemented programs to encourage regional settlement. Provincial Nominee Programs (PNPs) allow provinces to nominate immigrants based on local economic needs, effectively directing talent to regions outside the major CMAs.

Additionally, the Atlantic Immigration Program (AIP) launched in 2017 as an employer-driven initiative and has successfully channeled thousands of newcomers to the Atlantic provinces.

Lifestyle considerations increasingly matter. Beyond economics, you're prioritizing quality of life and regional opportunities. Smaller cities offer tangible benefits:

• Less congestion
• Easier commutes
• Growing job markets
• Greater access to nature

Many of you willingly trade the absolute size of the Toronto or Vancouver job market for a more affordable, less frenetic lifestyle.

What employment opportunities exist in smaller cities?

The historical appeal of Toronto, Vancouver, and Montreal rested on the perception that a larger, more diverse economy equated to better, higher-paying jobs for you as a skilled immigrant. However, the housing crisis has fundamentally changed the financial equation — forcing you to make explicit trade-offs.

Density versus affordability

Your core dilemma as a skilled newcomer is balancing opportunity against housing costs. Major cities offer the highest density of high-skill, corporate, and financial sector jobs.

However, the median wage premium is often entirely consumed by exorbitant housing costs, leading to a low quality of life and limited savings potential.

Smaller cities such as Calgary, Halifax, and Winnipeg offer significantly lower housing costs, immediately improving your financial stability and quality of life. The trade-off is often a narrower or less diverse job market, potentially requiring a lateral move or a longer job search — but one that's essential for your long-term economic security.

RemitBee poll results highlighted this prioritization — while 67% of respondents initially prefer a major city, 60% stated they would move to a smaller city for better housing opportunities, even with fewer job options. Housing security has become the precondition for your career planning, not the other way around.

Sector attractions

Smaller CMAs are successfully attracting you by strategically focusing their economic growth and immigration streams on high-demand, high-growth sectors.

Key attractions of mid-sized cities

Government-led programs work to minimize the perceived job risk associated with moving away from the Big Three. By nominating individuals with in-demand qualifications, these regions increase the likelihood of your employment matching.

Calgary example

Calgary serves as a strong case study of a major secondary market successfully leveraging its competitive advantages.

Affordability matters significantly. Calgary's average home prices (~$580,000) are substantially lower than Vancouver's, dramatically reducing your cost of entry to the housing market. Moreover, economic momentum has diversified beyond oil and gas, with booming technology and financial sectors offering highly skilled positions.

Digital and remote work (accelerated by the pandemic) has enabled you to settle in Calgary's affordable market while potentially working for companies based in Toronto or Silicon Valley — effectively monetizing the affordability gap.

The confluence of factors positions second-tier cities not as destinations of last resort, but as practical and economically superior alternatives for you when you prioritize immediate financial stability, a balanced lifestyle, and career opportunities.

Can smaller cities match community support?

Housing affordability and job opportunities are the primary push and pull factors driving your settlement decisions. However, your long-term success and satisfaction are ultimately determined by the ease of community integration and the resulting quality of life.

Social networks

The traditional challenge of moving to a smaller city is the presence of smaller, less established social networks and cultural communities. Toronto, Vancouver, and Montreal offer vast, highly diverse, and mature cultural ecosystems.

You often settle in areas with established ethnic and linguistic communities, which provide:

• Informal support structures
• Immediate sense of belonging
• Access to culturally specific goods

Mid-sized cities often have budding or fragmented cultural communities, which may increase feelings of isolation and place a greater burden on individuals to seek formal integration services. Worth noting that many newcomers report this challenge diminishes over time as they build new networks.

Service accessibility

Recognizing gaps in social infrastructure, many smaller urban centers have stepped up efforts to streamline accessibility to essential services (often with greater efficiency than their larger counterparts).

Through programs like AIP and regional PNPs, provincial and municipal governments in smaller cities can better identify and direct resources to a smaller, more contained population.

Results often include shorter wait times for:

• Healthcare access
• Credential recognition assistance
• Language training

Smaller cities often report less strain on their public school systems and primary healthcare providers than highly congested major metropolises.

For you as an immigrant parent, the ability to quickly enroll children in school or secure a family doctor is a major, non-monetary quality of life improvement (not something to underestimate when you're navigating a new country).

Quality comparison

The intangible metric of quality of life is a significant draw for you if you're seeking an escape from the relentless pace of major cities.

Smaller cities inherently offer lower levels of traffic congestion, shorter average commute times, and a generally lower cost of living across non-housing items.

Reduced daily friction directly translates into lower stress and improved mental well-being for you as you navigate a new country.

Additionally, greater access to green space is another advantage. Cities like Calgary, Halifax, and Winnipeg often boast closer proximity to parks, natural spaces, and recreational amenities appealing to you if you prioritize an outdoor-centric or family-friendly lifestyle.

What policy changes could support regional settlement?

Housing affordability is reshaping where you choose to live, and this shift means federal immigration policy and municipal planning need to adapt.

The growing popularity of mid-sized cities indicates that regional development efforts are effective, but it also poses new challenges for infrastructure, public services, and long-term sustainability.

Government programs

The primary tools for encouraging regional dispersion have been successful and must be strengthened.

Provincial Nominee Programs have proven to be the most effective mechanism for aligning your skills with regional labor market demands outside the major CMAs.

By granting provinces significant autonomy to select candidates based on local needs (as in Manitoba and Saskatchewan), the provinces serve as powerful pull factors. Future policy should explore increasing the allocation of caps for PNPs, particularly for provinces with high housing affordability.

The Atlantic Immigration Program has been highly effective in boosting population growth and retention in Atlantic Canada. Success lies in the employer's commitment to settlement support, which provides you with immediate job security and integration assistance — mitigating the risk associated with moving to a smaller center.

Targeted housing incentives could further strengthen regional settlement. Approaches might involve:

• Prioritizing nominations for skilled tradespeople who contribute to housing construction
• Providing targeted transitional housing support

Urban planning

Smaller cities, previously unprepared for rapid demographic shifts, must proactively adapt their urban planning and service delivery models.

Rapid immigrant-driven population growth can quickly strain housing supply and infrastructure in smaller cities leading to localized affordability crises. Municipalities must update restrictive zoning bylaws to encourage missing middle housing (duplexes, townhouses) near transit and job centers.

Investments in efficient public transit systems are critical. You often rely heavily on public transit, and a strong system means access to jobs, services, and cultural centers — reducing your reliance on expensive private vehicles.

Integration services

To maintain high retention rates, smaller cities must compensate for their lack of large, established ethnic communities by bolstering formal settlement services. Funding should prioritize immediate settlement services delivered quickly upon your arrival:

• Language assessment
• Credential recognition
• Job-matching

Additionally, local institutions including schools, hospitals, and police services require dedicated funding for cultural competence training to create welcoming environments.

By strategically addressing both supply-side (housing) and human capital (integration) concerns, policy can transform the trend of decentralized settlement from a temporary solution into a permanent model for sustainable growth across Canada.

Are immigrants choosing smaller cities?

The analysis confirms that housing affordability has emerged as the single most critical factor disrupting traditional Canadian immigrant settlement patterns. Research reveals a new settlement calculus:

Settlement Choice = Job Density + Community Support - (Housing Cost/Income Ratio)

Historically, the first two variables dominated your decision. However, the dramatic increase in the Housing Cost/Income Ratio in Toronto, Vancouver, and Montreal has rendered these cities functionally unaffordable for you and many other newcomers — creating an overwhelming economic push factor.

Sustained trend

The evidence points toward a gradual, sustained trend of decentralized settlement, driven by both market forces (affordability) and policy mechanisms (PNPs and AIP).

You, as the modern Canadian immigrant, are increasingly a "pragmatic settler." You're making rational economic decisions, choosing long-term financial stability and a higher quality of life in secondary markets over the initial, often precarious, allure of the largest cities.

Moreover, regional immigration programs are successfully capitalizing on the affordability crisis. By intentionally directing skilled immigrants to mid-sized cities that offer lower costs of living and specific labor-market demands, government policy is creating self-reinforcing regional economic vitality.

Key takeaways

The traditional "big city" Canadian Dream, long anchored in Toronto, Vancouver, and Montreal, is being actively reconsidered by you and other newcomers seeking financial stability and a sustainable quality of life.

1. Affordability is the new pull factor

Severe rental and ownership costs in Canada's major urban centers have created a strong economic push factor. The resulting shift in settlement is not merely accidental but a pragmatic choice, as 60% of polled immigrants are willing to trade fewer job options for greater housing stability.

2. Smaller cities are viable alternatives

Mid-sized cities such as Calgary, Halifax, and Winnipeg are successfully emerging as affordable alternatives. Success is rooted in lower costs (with home prices often a third of those in Vancouver), coupled with targeted regional immigration policies (PNPs, AIP) that align you with specific labor market demands.

3. The sustainability challenge remains

Regional dispersion is a positive trend for balancing national economic growth, but sustainability is not guaranteed. Smaller cities must urgently address potential strains on their infrastructure, housing supply, and settlement services to maintain high retention rates.