Canadian Population Underreported, Artificially Improving Job Data: CIBC

Canada’s population decline may just be a distant memory after the data is updated. In June, Statistics Canada’s (StatCan) population estimate contained a stark warning that its data will see an unusually large revision. CIBC economists expect the revision will be large enough to reverse the reported declines and expose a new problem—Canada’s job numbers may be worse than reported, and there’s no longer an excuse for poor economic growth.

Canada’s Upcoming Population Revisions Likely Eliminate Decline

StatCan reported a quarterly population decline of 55,025 people in Q1 2026, shedding 234,597 people since July 2025. The drop follows immigration caps after the country’s aggressive immigration programs saw its non-permanent residents (NPRs) population more than triple over a few years. At its peak, NPRs represented nearly 1 in 12 people in Canada. StatCan itself says the revisions are expected to start in September and will be larger than usual.  

CIBC economists warn that StatCan’s methodology counts expired permits as outflows. They argue that many of those with now-expired permits legally stayed in the country, obtaining another form of legal temporary status. 

“The full scope of these revisions is still unknown. However, it is highly likely that a sufficient number of NPRs will be recognized as legally resident in Canada — despite having previously been treated in published data as having exited — to revise Canada’s 2025 population change back into positive territory,” explains CIBC economist Benjamin Tal. 

He estimates 160,000 more people in 2025, and 210,000 in both 2026 and 2027. This suggests the baseline undercounting also skews future projections. 

While that may seem like a positive for aggregate demand, those same updates would expose underlying weaknesses in the broader economy. 

Canada’s Job Market Is Much Worse Than Thought with Revisions

Canadian employment data, like the Labour Force Survey (LFS), rely on population estimates. The LFS would have counted former NPRs as employed in its survey, but because StatCan uses a 12-month moving average to smooth NPR data, these individuals don’t immediately exist in the population denominator. CIBC warns that this lag is biasing the employment and unemployment rates, suggesting a potential erosion if upward revisions are made. 

Tal didn’t share any calculations on the LFS impact, but some quick napkin math shows it may be a big deal. StatCan reported a 6.8% unemployment rate in 2025, but it can be as high as 7.5% if CIBC’s estimates flow directly into the LFS. That’s the difference between a soft job market and one approaching recessionary levels. 

The 210,000-person methodology gap the bank projects for both 2026 and 2027 would have an even bigger impact. 

Canada’s Revisions Change Estimates and Narrative, Not Population 

CIBC’s revised scenarios show NPRs as a share of the total population will still fall, just not as much as stated. Canada originally stated its goal was to gradually reduce NPRs to 5% of the population by the end of 2026. It delayed that date until the end of 2027, though the PBO has previously suggested it’s being done through an accounting scheme—not pure throttle. 

CIBC projects that NPRs will represent 6.9% of the population in 2025, 0.5 percentage points above the current 6.4% estimate. The current public projections then see the share falling to 5.5% in 2026, and 4.8% in 2027. Tal’s projections don’t see that 5.0% threshold being met by 2027, instead falling just short at 5.4% of the population. Cue the sad trombone. 

The revisions don’t change the number of people in Canada, they’re just miscounted. However, these revisions have a material impact on the narrative around the Canadian economy’s health. The justification of a slowing economy due to a shrinking population no longer applies; it’s just a slow economy. The rising vacancy rates and slow home sales are now a mystery, as housing demand shouldn’t have dropped off so sharply. Unemployment is almost certainly higher than reported, and the per capita real GDP recovery is, well, not really recovering. 

Canada is also currently underestimating its population, but has historically overestimated it. For at least three decades before the recent population surge, it overestimated its immigrant population by roughly 1 in 7 people. It assumed every landed person continued to live in the country, even though all evidence pointed to the contrary. It’s unclear how those two issues balance, but what’s clear is Canada overestimated its population for a long time, and now it’s overestimating its population slowdown.