Canada Experiences First Population Decline Since Pandemic

Canada’s population decreased by 76,068 from July to October 2025, marking the first contraction since the onset of the COVID-19 pandemic. This decline is largely attributed to stricter immigration policies, as reported by Statistics Canada. The federal agency indicated that the drop in non-permanent residents significantly impacted the overall population figures.

The Canadian government has set a target to limit temporary residents to 5% of the total population, which currently stands at 41.6 million, by 2027. This shift contrasts sharply with the previous year, when Canada experienced a population surge of over 1 million, fueled by increased immigration aimed at addressing labor shortages.

Government Response and Economic Implications

Finance Minister François-Philippe Champagne emphasized the need to recalibrate immigration levels during a press briefing from Berlin. He stated that the government aims to “take back control over our immigration system” to strike a better balance between the capacity to welcome newcomers and the demand for entry into Canada.

According to Robert Kavcic, a senior economist at the Bank of Montreal, this population drop represents the “sharpest, and only second, quarter-over-quarter decline on record” since the 1940s. Kavcic highlighted that a significant population adjustment is underway, positioning this demographic shift as one of the most critical economic stories in Canada.

Former Prime Minister Justin Trudeau had previously sought to attract more immigrants, with plans to welcome up to 500,000 newcomers annually by 2025. By 2023, immigration accounted for approximately 97% of Canada’s population growth, according to federal statistics. However, the influx of new residents has also led to increased pressure on housing, social services, and youth unemployment.

In response to these challenges, Trudeau announced a reduction in the number of immigrants permitted to enter Canada, acknowledging that the government “didn’t get the balance quite right” after the pandemic. Current Prime Minister Mark Carney has continued to pursue this strategy, with plans to cut the target for new temporary residents from 673,650 to 385,000 for the next year, eventually lowering it to 370,000 by 2027 and 2028.

Provincial Variations and Future Outlook

The population decline was notably concentrated in the provinces of Ontario and British Columbia, which recorded the largest reductions. In contrast, Alberta and the territory of Nunavut experienced population growth during this period.

Statistics Canada reported that the country’s population contracted by 0.2% in the third quarter of 2025, driven primarily by a decrease in non-permanent residents, including international students and temporary foreign workers. This decline marks the most significant drop since comparable records began in 1971. As of October 2025, Canada had over 2.8 million non-permanent residents, accounting for approximately 6.8% of the total population.

As Canada navigates this demographic shift, the implications for its economy and social fabric remain a focal point for policymakers and citizens alike. The balance between welcoming newcomers and managing the associated challenges will undoubtedly shape the country’s future trajectory.