Canada’s slower population growth is giving renters some relief, but it may also be weakening the economy. This trade-off could eventually push the federal government to bring immigration levels back up.
Statistics Canada reports that Canada’s population grew by less than one per cent in the second quarter of 2025, the weakest pace in nearly a decade outside the pandemic. The decline was driven by tens of thousands fewer non-permanent residents, reversing the record inflows of recent years.
The immediate impact has been visible in housing: rents are stabilizing and home prices have softened in Toronto and Vancouver. But affordability remains stretched, and reduced demand is delaying new construction projects.
At the same time, fewer newcomers mean fewer students paying tuition, fewer workers filling essential jobs, and fewer consumers driving growth. With GDP per capita still falling, analysts warn that Ottawa may not be able to keep immigration numbers low for long if the economy continues to lose steam.
Regional impacts highlight the tension. British Columbia posted a rare population decline between April and July, while Ontario also saw significant losses in non-permanent residents. Quebec, meanwhile, continues to experience strong housing demand despite political pressure to limit immigration.
The current slowdown shows how immigration policy carries complex trade-offs. For now, Canada is experiencing short-term housing relief, but if the economy continues to falter, Ottawa may face pressure to reverse course and reopen the doors more widely.