Full Breakdown
Canada Experiences Historic Population Decline in 2025
3/19/2026, 8:01:47 AM
Overview of the Population Decline
In a significant demographic shift, Canada recorded its first annual population decline since records began in the 1940s, losing over 100,000 residents in 2025. According to Statistics Canada, the population decreased by 103,504 individuals, or 0.25%, between October 1, 2025, and January 1, 2026. This decline is primarily attributed to a substantial reduction in the number of temporary residents, a group that includes international students and foreign workers.
Drivers of the Decline
The decline in population is closely linked to federal government policies aimed at reducing the share of temporary residents in Canada. In 2025, the number of non-permanent residents fell by 171,296, bringing the total to approximately 2.67 million, which constitutes 6.4% of the overall population. This figure is a decrease from a peak of 7.6% in October 2024, following a period of high immigration levels during the COVID-19 pandemic. The Canadian government has set a target to reduce this share to 5% by the end of 2027.
Permanent immigration has provided some relief, with Canada welcoming 83,168 new permanent immigrants in the fourth quarter of 2025, although this number represents a 19.6% decrease from the previous year. Despite the overall population drop, permanent immigration was the only positive demographic change during this period, as natural increase (births minus deaths) was negative, with 781 more deaths than births.
Regional Variations
Population changes were not uniform across Canada. British Columbia experienced the steepest decline at 0.4%, while Ontario and Quebec saw decreases of 0.3%. Conversely, Alberta recorded a slight growth of 0.1%, continuing its trend as a net beneficiary of interprovincial migration. Alberta gained 3,684 residents through interprovincial flows, marking its 14th consecutive quarter of net population growth from other provinces.
Economic and Social Implications
The decline in temporary residents has already begun to impact rental markets, with advertised rents reaching a 33-month low as of February 2026. Major cities like Toronto and Vancouver have seen notable rent decreases. Concerns regarding labor market effects and youth unemployment prompted the federal government to tighten the influx of non-permanent workers and students.
Official Statements & Responses
Robert Kavcic, a senior economist at the Bank of Montreal, noted, “We’re now fully in an era of normalization, with population growth of around zero expected through 2027.” Cristobal D’Alessio, a spokesperson for Statistics Canada, emphasized the rarity of this population decline, stating, “2025 was the first calendar year to see an estimated decrease in the population since Confederation.”
What's Next
As Canada navigates this demographic shift, close monitoring of permit renewals, permanent resident admissions, and the government's timeline for achieving its temporary-resident target will be crucial. The patterns of population change across provinces will also be significant in determining whether this decline is a temporary correction or indicative of a longer-term trend in population growth normalization.
