Canada’s Population Growth Nearly Stalls in Q2 as Non-Permanent Residents Decline

Canada’s population growth slowed to a near standstill in the second quarter of 2025, with new Statistics Canada data showing the sharpest drop in non-permanent residents in more than five decades outside of pandemic years.

Between April 1 and July 1, Canada’s population grew by just 0.1% — adding 47,098 people. That marks the lowest second-quarter growth rate since records began in 1946, excluding pandemic periods.

Largest Decline in Non-Permanent Residents Since 1971

The slowdown was driven by a net loss of 58,719 non-permanent residents, the steepest quarterly decline since 1971 outside of pandemic years. The reduction reflects 2024 federal policy changes limiting temporary foreign workers and cutting study permits.

Before these restrictions, Canada’s population had surged by roughly 1 million people annually from 2022 through early 2025, fuelled largely by non-permanent residents.

Labour and Economic Impacts

Economist Armine Yalnizyan warns that while high unemployment may mask the impact now, key industries like construction, long-term care, child care, and food production rely heavily on foreign workers and could soon feel the pinch.

“To the extent that the population needing these things is growing and we don’t have Canadians who want to do these jobs and we don’t want to let more people in, we are going to be throttling economic potential,” she said.

Canada’s unemployment rate rose to 7.1% in August, the highest since 2016 outside the pandemic.

Aging Population Adds Pressure

The report also highlights Canada’s rising average age, which increased from 41.6 to 41.8 years in just three months. Nearly one in five Canadians is now over 65, a figure that reaches one in four in Newfoundland and Labrador.

Yalnizyan cautions that this shrinking working-age population will put further strain on the labour force. From 2016 to 2021, newcomers contributed nearly 80% of labour force growth, but with fewer arrivals, that trend is weakening.

Immigration Strategy Debated

Labour economist Parisa Mahboubi of the C.D. Howe Institute argues that Canada should prioritize attracting highly skilled immigrants rather than relying on sheer volume. She adds that improving productivity through technology and AI could also help offset demographic challenges.

“Immigration helps, but immigration is not able to prevent Canada from aging because immigrants also age,” Mahboubi said.