Canada’s taking a break from population growth to work on itself for a bit. Statistics Canada’s (StatCan) latest population growth projections reveal the impact of immigration policies and Millennials reaching their demographic peak. BMO Capital Markets explained to investors that this confirms a “major population growth adjustment,” where growth grinds to virtually zero before gradually improving by the end of the decade.
Canada Is Expected To See Its Population Growth Crash This Year
Source: BMO Capital Markets.
Canadian population growth is projected to stall this year at roughly 41.66 million people in 2026, adding fewer than 4k people in StatCan’s medium growth projection (M1). Some steam returns in 2027, and it returns to the typical growth Canada saw pre-2017.
“Total population growth is now projected to fall to roughly zero this year, before gradually climbing back to a run-rate of around 0.7%-to-0.8% by 2029 (M1 medium-growth scenario). That is all consistent with the arithmetic incorporating new immigration targets,” explains Kavcic.
While the rate is in line with historical levels, it’s a dramatic change from the recent surge. Kavcic adds, “Note that this will run cooler than the 1.1% annualized growth seen in the decade through 2019; and, of course, the 3% explosion seen in 2024.”
Canada’s Population Slowdown Fueled By Policies, Millennial Peak
Canada’s recent immigration policy changes aren’t the only drag on growth. The bank notes that StatCan assumes the birth rate continues to fall, eroding natural growth. “In fact, by 2028, Canada is projected to flip over to negative net births, as the older cohort ages and the Millennial group moves out of their reproductive years,” he explains.
Despite the short-term slowdown, StatCan’s projections don’t seem to affect long-term growth much. The latest medium projections show the population hitting 57.4 million by 2074, just 3.9% lower than the projections made last year. That works out to a 0.081% decline in compound annual growth, a variance smaller than the margin of error used in the projection.
Kavcic has previously highlighted the Millennial cohort’s demographic peak. Just a few months ago, he explained that the peak is one of the reasons there’s no quick recovery for the real estate market. It won’t be until Gen Z reaches its family formation years that the flow returns—assuming they can afford housing.
On that note, there’s evidence that high home prices suppress the desire of households to have children. Applying further pressure is the fact that prime-aged Canadians are leaving the country in record volumes.
*home prices make historic climb when population is at record lows*
“immigrants drove prices higher!”
*home prices still expensive as population shrinks, vacancies surge, and there’s excess building—developers can’t sell homes*
“The immigrants will probably be back to drive it higher!”
Reminds me of the US in ’08. The narrative was everyone wants to live there, but population growth only fell marginally while home prices cratered.
Good times.
It’s unfortunate we keep trying to patch over low customer growth, I mean, population growth primarily by immigration.
Does no one in government have kids? People say they don’t want what they can’t have. If they’re stuck living paycheck to paycheck, it’s almost impossible for them to even see a life where they’re able to have them.
Boomers did this to every generation too. First they patched over Gen X problems with immigration, then Millennials. From the looks of Gen Z, it’s becoming pretty clear they’re facing way too many problems to think about a modest life with kids and a family. No wonder they’re the most stressed out generation.
Wonder how immigrants arriving with kids managed to raise them, particularly coming from very difficult places to survive? Not sure how so many of the boomer generation survived to adulthood either, given after the war, there was no housing for returning vets hoping to start a family, as they had been fighting a war instead of going to college, starting careers, training for trades, and building wealth.
And yet start families they did, piling 3-4 kids into a double bed, or in homemade bunks, with parents sleeping in the living room of tiny houses apartments, and even just relative’s spare rooms. Everybody ate the same dinner-no catering to whims, and few could afford a meal out.
For early boomers starting families, not much was easier. Nearly everything you had was secondhand, and practical. A night out was a game of cards at the neighbours over a beer, with the babies piled to sleep on a bed with pillows around them-we had no specialty child equipment to haul along. There were no credit cards, and you didn’t borrow except for possibly the strictly limited amount the bank would permit for that little old house that needed everything repaired, which you attempted yourself to your best ability. Many moms of young children worked at least part time, as 1 income often wasn’t enough.
This isn’t to say it’s easy now…but if you’re waiting for everything to be perfect to have children….well…we didn’t, thank goodness.
While early boomers often lived modestly, the underlying economics made starting a family materially easier than it is today. In 1950–1970, the median U.S. home cost about 2–3× median income, compared with 6–7× income today, even before accounting for higher interest rates and student debt. A single income could often support a household because real wages for non-college workers were far higher relative to living costs; since 1973, labor productivity has risen ~70% while real wages rose only ~15%. Public policy also materially lowered costs: the GI Bill paid tuition and housing, college was often under $500 per year, and there was no widespread student loan burden delaying family formation. As a result, the average age of first birth rose from ~21 in 1970 to ~27 today, and the total fertility rate fell from 2.5 to ~1.6, despite modern conveniences. Childcare, healthcare, and housing now consume a far larger share of income than in the boomer era, even after adjusting for inflation. The issue isn’t waiting for “perfect conditions,” but that the baseline economic conditions required to raise children have objectively deteriorated.
It’s just a lull, next time it will be way worse, take England right now, only 38% are from there, they have become a seculure country, and the main religion is Muslim. Canada is next ,not right away but in a few years we will be on the same road as England. This is not an if, but very real. What we need is to control our borders and help and protect our people here now.