Is Canada Likely to See More Record-Breaking Population Declines?

Highlights

• Canada’s population fell at a record pace in Q3 2025, which begs the question: was the recent drop in population a one-off or should we expect similar decreases moving forward?
• The Q3 population decline was driven by the largest decrease in non-permanent residents (NPRs) since at least 1971. A rapid acceleration in NPR outflows was largely the cause. Although NPR inflows slowed as well, the decrease was comparatively modest.
• With more restrictive policy targeted at restraining inflows, the jump in NPR outflows suggests to us there is more at play. Indeed, the difficult labour market for Canadian youth ages 15 to 24 and the slowdown in hiring caused by the trade war with the US no doubt played a role in souring job prospects for NPRs in 2025 as well.
• Looking ahead, it’s likely that population growth will slow down meaningfully given the Government of Canada’s adjusted targets. Indeed, if the immigration targets are achieved, Canada’s population could decline for two consecutive years, before advancing again in 2027 and 2028. That said, one data point doesn’t make a trend, and the road to achieving the government’s ambitious targets may prove difficult.