There are many many empty homes in Canada -- in some cases entire "luxury" buildings sit mostly empty. These properties are sold even before they are built to international markets before they are even advertised for sale in Canada (if at all).
Land is valuable investment because the government decided many years ago that it can never decrease in value. It's a cycle: Canadian land value increases due to demand, this causes prices to increase, which increases the demand because it's a good investment. You'd be crazy to invest in business or anything else in Canada other than real estate. It's a sure thing and will give you the highest returns. If you a foreigner moving your money out of your country, even a little bit of loss is acceptable. There's no point in even renting out your property; the gains well exceed any reason to deal with that hassle. This is the reality.
The fact that people have to also live in the these investments is actually the problem! It's Bitcoin that people can sometimes live in. Its use as investment is completely divorced from the income of people living here and that is the problem.
> And if you stop being able to buy the food you want, get clean water, electricity, all that basic societal stuff because it is getting too expensive because there are too few labor sellers, then the land price (in real terms) will reflect that.
That's like saying Bitcoin should be worth nothing because it's useless as currency. I agree. But the reality is that Bitcoin is worth a lot -- just like property in Canada. It already doesn't reflect all that basic societal stuff because it's almost entirely unrelated to it. It should be but it's not.