Canadian Population Update Trims Nearly 4 Million People

Canada’s brief immigration policy shift will have a much bigger impact than people appreciate. Statistics Canada (Stat Can) released its latest population projections, factoring in the November 2024 immigration policy changes from the IRCC. Most see the 2-year shift as too small to have much impact, forgetting that population growth went from high to out-of-control just two years prior. Comparing the latest projection to last year reveals the brief period will have a compounding effect and trim roughly 4 million people from the long-term projection. Assets priced on the previous projected growth will require a huge adjustment.

Canadian Population To See A Sharp Slowdown In Growth 

Canada’s updated immigration projections reveal a major swing set to occur. The M1-medium projection (between low and high scenarios) shows 0.3% this year, and a 0.2% contraction in 2026. That is a big change from the recent breakneck record-setting growth observed in 2023. 

“StatCan’s latest population projection incorporates the recent federal Immigration Levels Plan, and the result is consistent with what we, and Ottawa, have assumed,” explains Robert Kavcic, senior economist at BMO. 

Adding, “That is, a sharp slowdown in overall population growth in 2025 to around 0.3% based on the M1 medium-growth projection. It then dips in 2026 before re-establishing a roughly 0.8% growth trend thereafter.” 

Source: BMO Capital Markets; Statistics Canada; Haver Analytics.

Annual growth of 0.8% was last observed back in 2015. Coincidentally (maybe not?), that’s when the country’s leading party was first elected and began using immigration as economic stimulus.

Canadian Population Growth Shift To Hit BC & Ontario Hardest In The Next Few Months

As expected, this policy change will impact some regions more than others. “At the provincial level, StatCan’s projection is consistent with the view that those provinces that have built up a larger-than-average share of nonpermanent residents in their population (e.g., B.C. and Ontario) will see larger swings, from outsized growth during 2021-24 to below-average growth in 2025 and 2026,” he notes.  

He doesn’t touch on how this will impact provinces that grew due to interprovincial migration. Since the primary driver was the cost of living in regions with sharp immigration. Removing that factor means less pressure driving interprovincial migration, especially if the cost of living stabilizes. 

If the cost of living stabilizes, it will be apparent fairly soon. “Look for the impact of the sudden shift in population growth to ring louder in those provinces—a prime example is rental markets that are already weakening quickly,” says Kavcic. 

Canadian Population Projections Drop By Millions of People 

Most see the 2-year slow growth as a relatively minor issue, but it has a big impact. Since growth is compounded, the reduction shaves off millions of people over time. Canada’s previous population growth, which drove expectations (and the value of many assets), is now overestimated by millions. 

Last year’s medium-growth projection saw the country’s population hitting 63 million people by 2073. The latest update now has that scenario at 59 million people in 2074, trimming a whopping 4 million people (-6.3%) than previously anticipated. That 0.3% growth followed by a 0.2% contraction seems much bigger now, doesn’t it? 

For those who think that’s a long time away, taxpayers now guarantee mortgages even longer than that timeline. 

It’s also important to note that projections are based on straightforward modeling. It assumes everything goes right and factors in birth rates, migration, and immigration policy. It doesn’t (and shouldn’t) account for difficult-to-see circumstances—like recessions, which lower growth and lead to higher outflows, or how the cost of living and affordability of space directly influence the natural birth rate. 

Then there’s the biggest wildcard—Canada’s primary source of immigrants is amongst the fastest-developing countries in the world. At the midpoint of the Stat Can projection, those regions will be at a similar level of development. In fact, many forecasts show that the Middle Class in these countries is growing so fast that the economic opportunity may exceed that offered in many advanced economies, including Canada. 

Estimating growth becomes more difficult in that scenario, especially if Canada doesn’t focus on historically differentiating values such as transparent governance, free speech, and preventing government overreach into personal autonomy. A similar menu of rights and a worse economic opportunity aren’t the strong selling points that policymakers believe. To be fair, many are just in denial about the erosion of those conditions.