Canada’s population growth is expected to come to a near standstill in 2026 following significant reductions in immigration and a sharp decline in the number of temporary residents, according to a new report from the Parliamentary Budget Officer (PBO).
The analysis examines the demographic impact of the federal government’s latest Immigration Levels Plan, introduced alongside the 2025 federal budget. The report suggests that population growth will remain essentially flat this year before gradually rising to around 0.3 percent in 2027.
According to the PBO, the slowdown will result partly from reduced permanent residency admissions, but the main factor will be a substantial drop in temporary residents, including international students, asylum seekers and foreign workers.
The report estimates that temporary residents, who made up a record 7.6 percent of Canada’s population in 2024, will decline to just under 5 percent by the end of 2027.
Canada experienced an unprecedented surge in population growth following the COVID-19 pandemic, driven largely by immigration. In 2022 alone, the country’s population increased by more than one million people, with nearly 96 percent of that growth coming from newcomers.
The trend intensified in 2023, when Canada’s population expanded by nearly 1.3 million the largest annual increase in the country’s history with immigration accounting for almost all of it.
Concern over the strain this rapid growth placed on housing, health care, education and public infrastructure prompted a major policy shift. In October 2024, the federal government announced a significant reduction in immigration targets.
Although population growth slowed afterward, Canada still added more than 700,000 people in 2024.
To put this in perspective, Canada had not seen annual growth above 600,000 people since 1949, when Newfoundland joined the country and its entire population was added to the national total.
Economists say the rapid influx of people contributed to mounting pressure on housing and public services.
A January 2024 report by the National Bank of Canada described the situation as a “population trap,” where population growth is so rapid that improvements in living standards become difficult to achieve. The report highlighted housing shortages as a key symptom, noting that only one housing unit was started for every 4.2 people entering the working-age population.
Public opinion also shifted during this period. Surveys conducted in late 2024 by the Association for Canadian Studies found widespread support for lowering immigration levels. Majorities across age groups, regions and demographic backgrounds said they believed the country was admitting too many newcomers.
More recent polling suggests this skepticism remains. A January 2026 survey by Research Co. found that only 34 percent of Canadians believe immigration has a mostly positive impact a notable drop compared with mid-2025.
Some economists believe the current slowdown in population growth could offer relief for Canada’s housing market and overstretched public services.
An October 2025 report by TD Economics suggested that a sharp decline in population growth is already easing pressure on infrastructure and social systems. Meanwhile, the Canada Mortgage and Housing Corporation reported that slower international migration has contributed to declining advertised rents in some markets.
The Parliamentary Budget Officer also projected earlier that reduced immigration levels could increase Canada’s real GDP per capita a common measure of living standards by about 1.4 percent by 2027.
Experts say the coming years could provide an opportunity for Canada to reassess its immigration strategy.
One major question is whether immigration should be used to offset the country’s aging population. Canada’s fertility rate has dropped to about 1.25 children per woman, far below the level required to maintain population stability.
However, research from the Migration Policy Institute suggests that immigration alone cannot solve the aging problem unless intake levels continuously rise over time, since immigrants themselves eventually grow older and retire.
Others argue that Canada should shift toward a more selective immigration system focused on attracting workers with specialized skills rather than prioritizing high numbers.
Supporters of this approach note that many of the world’s most prosperous countries including Iceland, Switzerland, Norway and Denmark maintain relatively small populations while achieving high standards of living.
As Canada enters a period of slower demographic growth, policymakers face an important decision: whether to return to rapid population expansion or reshape the country’s immigration system with a stronger emphasis on long-term sustainability.
