Canada Sees Historic Population Drop After Years of Rapid Growth
Something remarkable is happening in Canada right now, and it’s being described as one of the biggest demographic turning points in the country’s modern history. For the first time outside of a brief pandemic dip, Canada’s population has officially shrunk, and the numbers behind it are striking.
According to new estimates from Statistics Canada, the country’s population fell by about 76,000 people in the third quarter of 2025. That’s a decline of roughly 0.2 per cent, and it marks the largest quarterly population drop on record going back to the 1940s. Canada’s population now stands at about 41.6 million people, ending a long stretch of rapid growth that defined the pandemic and post-pandemic years.
This shift didn’t happen by accident. It was largely driven by deliberate policy changes in Ottawa aimed at slowing immigration, especially the inflow of temporary residents. Over the past year, strict caps were placed on international student permits, and limits were tightened for temporary foreign workers. As a result, the number of non-permanent residents has started to fall noticeably.
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In just one quarter, Canada had around 150,000 fewer temporary residents, dropping from just over three million in July to about 2.85 million by October. The share of non-permanent residents in the population also declined, moving down to 6.8 per cent from 7.3 per cent the previous quarter. The federal government’s longer-term goal is to bring that figure to 5 per cent by the end of 2027, and these latest numbers suggest that plan is beginning to take effect.
This moment stands in sharp contrast to what Canada experienced only a couple of years ago. During the pandemic recovery, population growth surged at unprecedented levels, fueled by international students and foreign workers. At one point in 2023, Canada added more than 420,000 people in a single quarter, the fastest growth seen since the 1950s. That explosive growth was welcomed by employers facing labor shortages, but it also intensified pressures on housing, rent prices, infrastructure, and public services.
Economists have long argued that this rapid population expansion was playing a major role in affordability challenges across the country. Now, with growth reversing, some relief may be felt in areas like housing demand. At the same time, slower population growth is expected to weigh on the broader economy, potentially acting as a drag on overall growth in the near term.
Regionally, the impact has been uneven. Ontario and British Columbia recorded their first-ever annual population declines, largely due to sharp drops in international students. Meanwhile, Alberta and Nunavut were the only places to see population growth this quarter, each edging up by about 0.2 per cent.
What’s clear is that Canada is entering a new demographic phase. After years of record-breaking expansion, a major population adjustment is now underway, and its economic and social consequences are likely to shape national debates for years to come.
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