Canada: Population Growth Grinds to a Halt

The latest population data comes as little surprise, with the demographic boom seen in prior years continuing to fade. The almost-stagnant first quarter can be attributed to a significant decline in non-permanent residents (NPRs), which fell by 61k. It represented the largest reduction in NPRs since Q3 2020 and the second biggest quarterly drop since at least 1971. As a result, the share of NPRs in the total population in Canada fell to 7.1% from a peak of 7.4% in the prior quarter. The recent slowdown in NPR growth signals that the federal government’s new targets for temporary residents are more clearly taking hold. At the same time, immigration levels remain high, with Canada admitting 104k immigrants in Q1 2025. However, this is the smallest number admitted in a first quarter in four years, reflecting the federal government’s lower permanent resident targets.

Across provinces, Alberta, BC, New Brunswick, Quebec and Saskatchewan continued to have an influx of NPRs in Q1 2025. Immigration remains high in most provinces, with New Brunswick, PEI and Saskatchewan posting the highest year-over-year growth (graph 1). Ontario, Canada’s most-populous province, saw almost no contribution to population growth from NPRs to start the year. As outlined in our research External link., the moderation in NPR levels should help ease inflationary pressures, particularly in cities that experience acute housing unaffordability such as Toronto and Vancouver. But that obviously risks seeing housing markets in those regions remaining weak for some time.

To put the most recent population data in context, our research External link. shows the federal government is still far from its population goals (graph 2). Achieving those targets will require fewer newcomers arriving and more NPRs leaving.

Looking ahead, the decline in NPRs and slower pace of immigration will probably see an improvement in Canada’s per capita real GDP (graph 3). But slowing population growth is also likely to become a headwind for Canada’s economy. This will compound the trade tensions with our southern neighbour and the mortgage renewal wall that should be a drag on growth in the near-term. We expect these challenges to remain top of mind for central bankers as they try to balance the recent uptick in inflation with the slowing economy.