EconoFACTS

March 18, 2026 | 09:09

Canada’s Population Estimates (2026Q1) — Shrink Nation

Economist

Robert Kavcic

Senior Economist and Director
Economics

Robert has been with BMO Capital Markets since 2006. He plays a key role... (Read more)

Robert Kavcic

Senior Economist and Director
Economics

Robert has been with BMO Capital Markets since 2006. He plays a key role... (Read more)

Canada’s population fell 0.2% y/y in Q1, the first annual population decline on record going back to WWII (these data are marked as of January 1st, 2026). That is down sharply from highs above 3% seen in mid-2024, and declines were seen quarter-over-quarter for the second period in a row. StatCan does note that larger-than-normal work/study permit extensions could lead to some upward revisions in future releases.

This comes as the result of tighter immigration policy at the federal level, which was reinforced in the 2026-28 Immigration Levels Plan (released in November). Outsized population growth was playing a major role in many economic issues, including housing affordability; surging rent; productivity and infrastructure stress; services inflation; and youth unemployment rates. We're now fully in an era of normalization, with population growth of around zero expected through 2027, before settling back to a baseline of just under 1%.

Nonpermanent resident (NPR) net flow remained negative following caps on international students and temporary foreign workers, with a net outflow of 171,000 in the quarter. That brings the total net outflow to 461k over the past year. Ottawa is targeting a 5% share from 7.6% at the high and 6.5% as of the latest quarter. That implies further net outflows ahead. The impact is being seen most vividly in the rapidly-softening rental market. Regionally, the impact of net NPR outflows is, as expected, cutting deeply in B.C. and Ontario, where the population has declined 0.7% in the past year.

Meantime, permanent immigration remained solid at above 313k (saar), although that's also down from recent highs given reduced federal targets. Ottawa’s target for the upcoming three years is now set at 380 per year, and this source continues to add 0.8 ppts to annual growth.

Canadians also continue to move around the country, but the broad pace of overall interprovincial migration is slowing. Net migration to Alberta remained strong and has run at just over 22k people over the past year. While that is half the rate seen in 2024, a strong economy and favourable affordability remain draws. Atlantic Canada’s inward migration boom has flattened out to just 4 on net over the past year, down from a high of 23k during the height of the pandemic-era movement. Ontario is seeing fewer net outflows each quarter, although the past year has still run at 14k. In one respect, the affordability arbitrage (i.e., moving from Southern Ontario to either Alberta or Atlantic Canada) has mostly dissipated as house price differentials have narrowed. Future migration patterns will likely be driven more by relative economic/job market fundamentals rather than a pure hunt for affordability.

Finally, Canadians continue to have few babies, with net births running at 31k in the latest year. One notable shift to watch will be the potential for negative net births by around 2028, given the combination of a low birth rate and some aging large cohorts. That would, of course, be another first in Canadian demographics.

The Bottom Line: The major population adjustment is well underway, and it is having impacts across various aspects of the economy including housing, consumer spending, the job market, inflation, productivity and per-capita GDP. It's touching pretty much everywhere. While the treatment of expiring permits may lead to some data revisions and conversions to permanent resident status, the bigger picture is that the adjustment will be ongoing into 2027.