The solution is not to build ever denser communities, but to make it so that people don't _have_ to move into a large city from an ever-shrinking list.

No. Only 59% (and shrinking!) of the population live in places with more than 100,000 people. You are correct that ~80% of the population live in urban areas, but Canada's definition for urban includes places with 1,000 people.

> If a large portion of your population is living in large cities and large cities are experiencing a housing shortage then it makes sense to me to say there is a housing shortage in Canada.

59% is still a large portion, to be fair. But what is a housing shortage anyway? The technical definition for shortage is a situation where price is unable to rise (e.g. due to government regulation), but that is literally the opposite of what these cities see. If you have the money, you can pay as much as you want for a house, and you'll have no trouble acquiring one as you pay more and more. That's a normally functioning market, not an exceptional circumstance like shortage is meant to call attention to.

I expect you are alluding to the real problem being that many people in these cities are too poor to be able to reasonably participate in the city's economy. That is a problem, a big problem even, but to call that problem a "housing shortage" seems like a misnomer in every way.