Canada’s population grew by just 0.5% in the 12-month period ending July 1, marking the slowest pace of growth since World War I as the federal government keeps immigration restrictions in place, Statistics Canada reported Wednesday.
The country’s population rose by about 189,000 people to reach 41.8 million, the smallest percentage increase since 1915-16. The slowdown follows several years of exceptionally strong population growth that had been driven by immigration in the aftermath of the COVID-19 pandemic.
That earlier surge was fuelled largely by a rise in international students and temporary foreign workers. It drew sharp criticism of former prime minister Justin Trudeau’s government and eventually prompted immigration policy changes designed to reduce the number of people entering the country.
Temporary Residents and New Immigrants Decline
Wednesday’s data show the number of non-permanent residents fell by 154,614, bringing the temporary resident population down to 2.8 million. The number of new immigrants welcomed into the country also dropped for a fourth straight year, reflecting lower annual targets for permanent resident admissions set by Ottawa.
The slowdown has also brought a return to population aging, with the number of people in their 20s declining as fewer international students arrive in the country. Among the provinces, Alberta posted the fastest growth rate at 1.5%.
BMO senior economist Robert Kavcic noted that the latest figures actually revised upward earlier estimates that had suggested Canada’s population was shrinking, meaning the report was less negative than it appeared at first glance. Still, he said the shift from recent years is significant. “The reality is that we’re seeing 0.5% population growth, which is still a major shift from the last couple years,” Kavcic said.
Economic and Housing Impacts
The slowdown in population growth has been one of the factors behind softer economic activity in Canada, alongside the effects of tariffs that have battered certain sectors and stirred broader uncertainty. The housing sector has felt a particular impact from lower immigration levels, with both home sales activity and prices stalling.
Kavcic said Canada’s post-pandemic experience showed that the economy could not sustain population growth exceeding 3%, framing the current slowdown as a “necessary adjustment.” While the earlier population boom helped lift gross domestic product, it also coincided with weak productivity and difficulty attracting investment.
According to Kavcic, Canada is now attempting to pivot toward boosting capital investment, pointing to the country’s first investment summit held last week and federal policy changes aimed at incentivizing investment. “So if it plays out that way, that’s a pretty sharp reversal from what we’ve seen over the last decade in Canada, which was a lack of capital investment and really, really significant population growth,” he said.
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