Canada: Data Revisions Complicate the Path to the Federal Population Target

Canada’s population grew slightly (+80.3k, quarter over quarter) in the second quarter of 2026, continuing the slowdown that began in late 2024. That said, the most notable feature from the latest population print was the size of historical revisions (graph 1). Population growth in the 2025 calendar year was revised up from 0.6% to 1.0%, while estimates from 2022 to 2024 were revised down more modestly. These revisions largely reflect changes to Statistics Canada’s estimates of non-permanent residents (NPRs). In their latest publication, Statistics Canada indicated the addition of Canada Border Services Agency’s (CBSA) data on entries and exits, along with Immigration, Refugees and Citizenship Canada’s (IRCC) administrative data on permit extensions. These additional sources provide a more accurate measure of NPRs residing in Canada. As a result, NPRs fell by roughly 185k between Q4 2024 and Q1 2026, rather than 591k under the previous population numbers.

The federal government has made some progress on its goal of reducing the number of NPRs to 5% of Canada’s total population. The share fell to 6.7% as of July 1 of this year from its peak of 7.2% on October 1, 2024. Despite this development, the federal government may require more aggressive declines in NPR levels over the coming quarters to meet its 5% target by October 2027 (graph 2).

Assuming current immigration levels and natural population growth trends continue, NPRs would need to fall by roughly 905k by the end of next year from their most recent level. This is roughly double the previously estimated decline, putting the Government of Canada’s target increasingly out of reach (graph 3). In that context, Prime Minister Mark Carney recently signalled External link. that there may be a good argument for “a few more years of restraint”, suggesting more NPR reductions are possible in the years ahead. Given that students have borne the brunt of the decline in NPRs so far, this suggests future restrictions may focus on other categories such as temporary foreign workers, unless changes are made to the target. Canadians will surely get a better sense of the country’s immigration policy once the federal government publishes an update on its immigration targets this fall.  

The federal government’s immigration policies have broad implications for the Canadian economy. In the near-term, slower population growth is supporting gains in Canada’s per-capita real GDP External link., easing pressures on the housing market External link. and mitigating the labour market weakness stemming from the trade war. However, as stated in our latest outlook External link., sustained weakness in population growth is an economic headwind, particularly given Canada’s falling participation rate amid an aging population, and its low fertility rate External link..