Here’s why Canada just logged its largest ever population drop

Canada’s population fell by about 76,000 in the third quarter, a rare decline outside the pandemic, driven by immigration changes. Heather Wright explains.

Canada logged its largest population drop on record, according to federal estimates, in a decrease largely attributed to immigration policy.

Statistics Canada published its preliminary Q3 report Wednesday morning, which estimated Canada’s population to be 41,575,585 as of Oct. 1, a drop of around 76,000 from July to October.

The main factor was a sharp reduction in non-permanent residents, whose numbers dropped by 176,479 – the largest drop since comparable records began, wrote the agency.

On Oct. 1, 2025, there were about 2.8 million non-permanent residents in Canada, accounting for 6.8 per cent of the total population. On July 1, there were about three million (7.3 per cent).

During that time, a record-high 339,505 temporary permits expired. Just 163,026 were issued.

First drop since pandemic

It’s the first recorded quarterly drop since the pandemic began.

Canada’s population has been steadily rising since the fourth quarter of 2020, when the population stood at 38,027,406 – about 1,200 fewer than the previous quarter.

That was the first time on record that Canada’s population dropped. Job vacancies grew significantly in the following years, pushing the federal government to loosen temporary foreign worker rules to help businesses fill those jobs.

In 2022, the government revealed its plan to welcome 500,000 immigrants by 2025.

At the time, there were questions on whether the program was ambitious enough. After all, there were roughly one million jobs sitting vacant across various sectors.

Vacancies fell, and in March 2024, then-immigration minister Marc Miller revealed that for the first time, Canada would introduce a soft cap on the number of new temporary resident arrivals, one of several steps to rein in population growth. During his announcement, Miller said Canada had become “addicted” to temporary workers.

Then, in September 2024, Miller introduced a plan to tighten the amount of available study permits and limit work permit eligibility for spouses of some master’s students and foreign workers. Instead of 500,000, Canada would accept just 395,000 permanent residents in 2025, and even fewer the year after.

“The reality is that not everyone who wants to come to Canada will be able to—just like not everyone who wants to stay in Canada will be able to,” Miller said at the time.

The plan predicted Canada’s population would decrease 0.2 per cent in 2025 and 2026, before bouncing back to a 0.8 per cent growth in 2027.

‘Too abrupt?’

“At any point in time, we had over two million non-permanent residents on the ground in Canada. That’s a fairly large number for a population of just 41 million,” said Michael Haan, sociology professor and demographer at Western University.

Haan says managing Canada’s immigration is a delicate dance.

“I struggle with it a little bit,” he told CTV News. “One of the things that there doesn’t seem to be any huge consensus on is what our perfect immigration levels should be.”

According to a 2023 Bank of Canada study, newcomers increase overall consumption and the demand for housing, both of which are inflationary. On the other hand, they also increase the labour supply, productivity and tend to spend less once established. Those factors are deflationary, the report found.

Haan says he’ll be looking at how a shrinking population will affect housing prices and the labour market. While there may not be a consensus on an optimal level of immigration, he says drastic shifts should generally be avoided.

“This is a fairly abrupt reduction in the number of international students. Was it too abrupt?”

With files from CTV’s Heather Wright