Canada’s population fell by about 76,000 people in the third quarter of 2025, marking the steepest quarterly decline recorded since national data tracking began in the 1940s, according to new figures released by Statistics Canada.
Outside of a brief dip during the height of the COVID-19 pandemic, this is the first sustained population decline the country has experienced in nearly eight decades. The drop follows sweeping federal policy changes aimed at slowing immigration after years of rapid population growth.
Statistics Canada estimates the country’s population shrank by 0.2 per cent between July and September, bringing the total population to approximately 41.6 million. The decline was largely driven by a sharp reduction in the number of international students, more than a year after Ottawa imposed caps on study permits.
The figures suggest the federal government’s efforts to rein in immigration are beginning to take effect. However, economists caution that slowing population growth carries economic risks, particularly given Canada’s long-term decline in birth rates and its reliance on immigration to sustain labour force growth.
“A major population adjustment is well under way, and it remains one of the biggest economic stories in Canada,” said Robert Kavcic, senior economist at the Bank of Montreal, in a research note released Wednesday.
The latest data stands in stark contrast to the post-pandemic period, when Canada saw unprecedented population gains fueled by surging numbers of international students and temporary foreign workers. In the third quarter of 2023 alone, the population grew by roughly 420,000 people — the fastest quarterly increase since 1957.
Ottawa has pledged to reduce non-permanent residents to five per cent of the total population by the end of 2027. That share has already fallen to 6.8 per cent, down from 7.3 per cent in the previous quarter. As of Oct. 1, Canada had about 2.85 million temporary residents, compared with just over three million on July 1.
The proportion of non-permanent residents rose sharply between 2021 and 2024 as pandemic-era policies encouraged international students to stay and employers pushed for expanded access to foreign labour amid acute worker shortages. During that period, the number of temporary residents more than doubled.
Economists have linked the population surge to mounting pressures on housing affordability and rental markets. In 2024, the federal government reversed course, tightening caps on study permits and scaling back temporary foreign worker programs in response to growing public concern.
Those measures now appear to be reshaping demographic trends. Statistics Canada reported roughly 73,000 fewer study-permit holders in the third quarter, with the decline concentrated in Ontario and British Columbia. Both provinces posted their first annual population declines on record.
Alberta and Nunavut were the only jurisdictions to record population growth during the quarter, each expanding by 0.2 per cent.
LJ Valencia, an economist with Desjardins Group, said the reduction in non-permanent residents is likely to lift Canada’s real GDP per capita after weaker growth in recent years. Still, he warned that slower population growth could weigh on overall economic momentum.
“Weaker population growth is poised to act as a drag on the broader economy,” Valencia wrote, noting that the slowdown adds to existing pressures such as trade uncertainty and mortgage renewals — challenges likely to remain on policymakers’ radar in the months ahead.
