Authors: Laura Dillon Cain and Eric Herzberg
(Bloomberg) — Canada’s population fell 0.2 per cent in the third quarter to 41.6 million people, the only quarterly decline on record outside the COVID-19 era and a dramatic shift from explosive post-pandemic immigration growth.
Statistics Canada reported Wednesday that the decline was driven by a record decline in non-permanent residents. Prime Minister Mark Carney continues to implement policies introduced by his predecessor to reduce the number of foreign students, temporary workers and asylum seekers in the country, following a surge in the number of foreign students, temporary workers and asylum seekers in 2023 and 2024.
The population grew by just 0.2% year-on-year in the third quarter, the lowest figure since records began in 1947. This is in sharp contrast to the annual growth rate of 3.2% in 2023, which is in line with some developing countries with high birth rates.
Since the outbreak, Canadian universities have enrolled a large number of foreign students, mostly from India, resulting in one in 40 people in the country holding an international student permit. Rapid growth has put pressure on housing and services, driving public support for immigration to its lowest point in decades.
Then-Prime Minister Justin Trudeau, whose approval ratings have been hit hard by the immigration pushback, announced a plan in late 2024 to reduce Canada’s population by 0.2% a year in 2025 and 2026 before rebounding to moderate growth in 2027. He promised to reduce the proportion of temporary residents in Canada to 5%.
Carney further cut the number of temporary residents allowed to stay in the country over the next three years in an immigration plan released last month, as well as further cuts to study permits. But at the same time, he pledged $1.7 billion to recruit international researchers and create a new way to attract H-1B visa holders.
As of the third quarter, temporary residents accounted for 6.8% of Canada’s population, down from a peak of 7.6%.
The number of non-permanent residents in the country fell by 176,000 in the third quarter, the largest decline since records began in 1971. This decline exceeded the declines in the first and second quarters of this year.
The Bank of Canada said it expects weak population growth and rising unemployment due to the trade conflict with the United States to cause consumer spending to slow in 2026 and 2027. The bank also said lower immigration would slow potential growth in coming years, limiting how quickly the economy can expand without sparking inflation.
“A major demographic adjustment is underway and remains one of Canada’s biggest economic stories,” Bank of Montreal senior economist Robert Kavcic said in a note to investors.
“Impacts we are tracking include: significant softening in the rental market, especially where supply is abundant; easing inflationary pressures in the services sector; easing of softness in the youth job market; and a possible pickup in productivity and real GDP per capita growth.”
Ontario and British Columbia experienced the largest overall population declines, followed by Manitoba and the Northwest Territories. All provinces and territories except Alberta and Nunavut experienced population declines, but Alberta’s quarterly growth rate of 0.2 per cent was the lowest since the pandemic began.
The number of non-permanent residents decreased in the third quarter in all provinces and territories except Nunavut. The biggest decline was in Ontario, which also saw the most international student enrollment during the post-pandemic boom. Statistics Canada said the decline was primarily due to study permit holders.
The agency said that while temporary immigration is the main reason for Canada’s population decline, permanent immigration offsets the impact to some extent. Canada welcomed nearly 103,000 permanent residents, similar to quarterly growth since the fourth quarter of 2024.
–With assistance from Mario Baker Ramirez and Curtis Heinzl.
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Last modified: December 17, 2025
