Canada’s population drops as country caps immigration

Canada’s population dropped by 76,068 between July and October – a contraction driven mainly by limits on immigration, the federal statistics agency has said.

The decrease was due mainly to a drop in non-permanent residents, Statistics Canada said on Wednesday, and comes after Ottawa set a goal to restrict temporary residents to 5% of the 41.6 million population by 2027.

It’s a sharp change from 2022, when the population grew by more than a million people for the first time, fuelled in part by efforts to recruit immigrants to ease labour shortages.

“We needed to bring our immigration level to a more sustainable level,” Canada’s finance minister, François-Philippe Champagne, told reporters.

Champagne, speaking from Berlin during a visit to Europe, said the government’s goal is to “take back control over our immigration system and find a better balance between our capacity to welcome people and the number of people who want to come to the country”.

The population drop is the “sharpest, and only second, quarter-over-quarter decline on record dating back to the 1940s”, said Bank of Montreal senior economist Robert Kavcic in an analysis.

“A major population adjustment is well underway, and it remains one of the biggest economic stories in Canada,” he added.

Former Prime Minister Justin Trudeau made efforts to attract more immigrants to the country, including a plan to welcome half a million immigrants a year by 2025.

By 2023, the vast majority of Canada’s population growth – about 97% – was driven by immigration, according to federal data.

But the increase in newcomers was blamed for putting pressure on the cost of housing, stress on social services and youth unemployment rates.

Trudeau last year announced a sharp cut in the number of immigrants Canada allows into the country in an effort to pause population growth, saying his government “didn’t get the balance quite right” when it boosted immigration post-pandemic to address labour shortages.

Prime Minister Mark Carney has continued in that vein, with Ottawa seeking to significantly cut targets for new temporary residents from 673,650 to 385,000 next year, and 370,000 in 2027 and 2028.

According to Statistics Canada’s preliminary numbers released on Wednesday, the country’s population shrank by 0.2% in the third quarter of 2025 – the first decline since the Covid pandemic in 2020.

It was driven by a drop of non-permanent residents – primarily international students as well as temporary foreign workers – in the third quarter of 2025, the largest seen since comparable records began in 1971.

In October there were more than 2.8 million non-permanent residents in Canada, about 6.8% of the total population.

The provinces of Ontario and British Columbia saw the biggest drops in population. Only Alberta and the territory of Nunavut saw their populations grow.