Canada has recorded a sharp population decline in the latest quarter, a shift largely linked to tighter controls on international students, signalling a major reversal for a country that has relied on immigration to fuel economic expansion.
According to new figures released on Wednesday by Statistics Canada, the national population contracted by 0.2 percent in the third quarter, falling to 41.6 million from 41.65 million as of 1 July, reports The Guardian.
This marks only the second quarterly population decrease ever documented, the previous one occurring in 2020 during the height of Covid-19 border closures.
Unlike the pandemic-era decline, the current downturn is mainly the result of a significant reduction in international students, following the federal government’s commitment to limit the issuance of study permits.
Just a year earlier, in the third quarter of 2023, Canada saw its strongest quarterly population increase since 1957, with an additional 420,000 people over three months.
Non-permanent residents now account for about 6.8 percent of the population, down from 7.3 percent in the previous quarter.
Prime Minister Mark Carney has pledged to bring this share down to 5 percent by the end of 2027. A key component of this strategy is a steep cut in international student permits, from a planned 305,900 new entrants in 2025 to 155,000 in 2026, followed by 150,000 annually in 2027 and 2028.
Meanwhile, Ottawa intends to modestly raise permanent immigration levels compared to earlier targets, projecting 395,000 permanent residents in 2025, 380,000 in 2026, and 365,000 in 2027.
Finance Minister François-Philippe Champagne, recently acknowledged the strain on public resources, saying Canada had “exceeded our capacity to welcome” newcomers and deliver essential services in recent years.
Commenting on the data, Bank of Montreal economist Robert Kavcic wrote in a note on Wednesday that a “major population adjustment is well under way and it remains one of the biggest economic stories” facing the country.
“In order to hit the non-permanent resident target share, we’ll need to see population growth run barely above zero through 2028, before settling back into a longer-term run rate of just under 1 percent,” he said.
He added, “We’ve argued all along that the explosion in population growth to nearly 1.3 million people within a year at one point, was playing a major role in many economic issues Canadian policymakers have been struggling to deal with,” pointing to “significant weakening” in the rental market, reduced pressure on services inflation, and changes in real GDP per capita growth as some of the emerging effects.
The latest data also show that population numbers declined across every province and territory except Alberta and Nunavut, both of which posted growth of 0.2 percent.
