Canada has experienced its most significant quarterly population contraction since the 1940s, with federal statistics revealing a decline of 76,068 residents between July and October 2025. This demographic reversal marks a dramatic shift from the record growth witnessed in 2022, when Canada’s population expanded by over one million people.
The unprecedented decrease stems primarily from reduced numbers of non-permanent residents, including international students and temporary foreign workers. Statistics Canada’s preliminary data indicates this represents the largest quarterly drop since comparable record-keeping began in 1971. The contraction follows the federal government’s strategic decision to impose stricter limits on temporary residency permits.
Finance Minister François-Philippe Champagne, speaking from Berlin during a European visit, characterized the adjustment as necessary to achieve “a more sustainable level” of immigration. “Our goal is to take back control over our immigration system and find a better balance between our capacity to welcome people and the number of people who want to come to the country,” Champagne told reporters.
This policy reversal addresses mounting concerns that rapid population growth had exacerbated housing affordability crises, strained social services, and contributed to youth unemployment. The current administration under Prime Minister Mark Carney has continued the course set by predecessor Justin Trudeau, who acknowledged his government “didn’t get the balance quite right” when boosting immigration post-pandemic to address labor shortages.
Ottawa now aims to reduce temporary residents from the current 6.8% of the population (approximately 2.8 million people) to just 5% by 2027. Targets for new temporary residents will be slashed from 673,650 to 385,000 next year, with further reductions to 370,000 planned for 2027 and 2028.
The demographic shift has affected regions unevenly, with Ontario and British Columbia experiencing the most substantial population decreases. Only Alberta and the territory of Nunavut recorded growth during this period. Bank of Montreal senior economist Robert Kavcic noted that “a major population adjustment is well underway, and it remains one of the biggest economic stories in Canada.”