OTTAWA, ON – Canada has experienced its largest quarterly population drop since the COVID-19 pandemic, a direct consequence of the federal government’s aggressive measures to rein in temporary migration.
New estimates from Statistics Canada, released Wednesday, show the national population fell by 0.2 per cent in the third quarter of 2025 (July 1 to September 30). The total population now stands at 41.6 million, down from 41.65 million in July.
This marks a dramatic turning point for a country that has historically relied on high immigration levels for economic growth. The only other quarterly decline on record occurred in 2020 and was attributed to global pandemic border restrictions.
Fuelled by Non-Permanent Resident Deficit
The primary driver of the decline is a sharp reduction in non-permanent residents (NPRs), which fell by 176,479 in a single quarter—the largest such reduction since 1971.
- International Student Impact: The decline is largely attributed to a massive drop in international student arrivals. From January to August 2025, arrivals plunged by 60 per cent compared to the previous year.
- Permit Targets: Prime Minister Mark Carney has pledged to reduce the share of temporary residents to 5 per cent of the total population by 2027. This includes cutting international student permit targets by nearly half, from 305,900 in 2025 down to 155,000 in 2026.
Finance Minister François-Philippe Champagne told reporters that the cuts were necessary because Canada had “exceeded our capacity to welcome” and provide essential services to newcomers in recent years.
Economic Implications and Shifting Markets
The population adjustment is already having visible effects on the Canadian economy. Robert Kavcic, an economist at the Bank of Montreal, called the shift “one of the biggest economic stories” in the country.
Potential impacts identified by economists include:
- Rental Market: A “significant weakening” of the rental market as student demand drops.
- Inflation: Reduced pressure on services inflation.
- GDP: Potential growth in real gross domestic product (GDP) per capita as the population stabilizes.
Regional Breakdown: Alberta and Nunavut Buck the Trend
The population decline was widespread, affecting every province and territory except for two:
- Alberta: Reported a net increase of 0.2 per cent, driven primarily by natural increases (births) and interprovincial migration, despite a sharp drop in international immigration.
- Nunavut: Also achieved a 0.2 per cent increase.
The largest drops in non-permanent residents were recorded in Ontario (-107,280) and British Columbia (-26,242).
Analysts suggest that population growth will likely remain near zero through 2028 to meet federal temporary residency targets before settling back to a long-term rate of just under 1 per cent.
