Canada records largest population decline on record amid immigration reset

(Horizon Weekly) – Canada has recorded its largest quarterly population decline since comparable records began in 1946, marking a sharp reversal from the rapid growth seen in recent years.

According to Statistics Canada, the country’s population fell by 76,068 people, or 0.2 percent, between July 1 and October 1, 2025. Aside from a brief and limited decline during the COVID 19 pandemic, this represents the most significant population contraction in modern Canadian history.

The decline is almost entirely the result of a steep reduction in non permanent residents following federal policy changes aimed at tightening immigration and easing pressure on housing, infrastructure, and public services.

During the third quarter of 2025, the number of non permanent residents fell by 176,479. This drop was driven by a record number of temporary permits expiring, with 339,505 permits lapsing compared to just 163,026 new permits being issued. The largest decreases were recorded among international students, whose numbers fell by 73,682, and individuals holding combined work and study permits, which declined by 67,616.

As a result, non permanent residents now account for 6.8 percent of Canada’s population, down from a peak of 7.6 percent in 2024. The federal government has stated that it aims to further reduce this share to approximately 5 percent by 2027 as part of a shift toward more sustainable population growth.

The population contraction was felt across nearly the entire country. Every province and territory reported a decline or stagnation except for Alberta and Nunavut, both of which posted modest growth of 0.2 percent.

Ontario experienced the largest absolute loss, with its population shrinking by 66,888 people, or 0.4 percent, the biggest quarterly decline in the province’s history. British Columbia followed with a decrease of 14,335 people, marking its first annual population drop on record.

Economists say the demographic shift is already beginning to reshape key sectors of the economy. The slowdown in newcomer arrivals is easing pressure on the rental market, particularly in student heavy urban centers in Ontario and British Columbia. Rental demand has softened, vacancy rates have risen in some areas, and asking rents on new leases are beginning to stabilize after years of rapid increases.

In the labour market, job vacancies were already trending downward, falling by 14,000 in the third quarter. While slower population growth may provide short term relief for younger job seekers, analysts warn that longer term labour shortages could resurface, especially as Canada’s population continues to age.

Canada’s natural population increase remains weak. Births exceeded deaths by only 17,600 during the quarter, underscoring the country’s growing reliance on immigration to sustain population growth. With the last cohort of baby boomers reaching retirement age, demographic pressures are expected to intensify in the coming years.

Some economists argue that the population correction could improve real GDP per capita, which has struggled amid rapid population growth in recent years. However, weaker overall consumer demand may weigh on economic growth in the near term.

As of October 1, 2025, Canada’s population stood at 41,575,585. While permanent immigration remained relatively stable at approximately 103,000 arrivals during the quarter, the federal government’s policy pivot suggests that the era of explosive post pandemic population growth has come to an end.

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