Canada's Population Sees Rare Dip Over International Students

Canada just experienced something it almost never does: Its population shrank. Statistics Canada says the country's head count slipped 0.2% in Q3, or about 76,000 people, to 41.6 million. The numbers haven't seen a dip like this since 2020, when COVID border rules froze movement, per the Guardian and New York Times. This time, the drop is tied mainly to a sharp pullback in international students after Ottawa moved to curb study permits. The Times notes it's the largest population drop since the mid-1940s.

The reversal is striking for a country that had been leaning heavily on immigration to drive growth. In 2023's third quarter, Canada added 420,000 people in just three months, its fastest pace since 1957, per the Guardian. Now, nonpermanent residents account for about 6.8% of the population, a drop from 7.3% the previous quarter. Prime Minister Mark Carney wants that share down to 5% by the end of 2027, in large part by slashing new international-student permits from a target of 305,900 in 2025 to 155,000 in 2026, then 150,000 in 2027 and 2028.

At the same time, the government plans a modest bump in permanent immigration compared with earlier targets: 395,000 new permanent residents in 2025, 380,000 in 2026, and 365,000 in 2027. The approach reflects a political and practical pivot from the Liberal-era surge under Justin Trudeau, amid warnings that local services are under strain. The country has "exceeded our capacity to welcome" immigrants in recent years, Finance Minister Francois-Philippe Champagne said.

Economist Robert Kavcic of the Bank of Montreal calls the shift "one of the biggest economic stories" in the country, arguing that a "major population adjustment is well underway." To hit Ottawa's nonpermanent resident target, he estimates population growth will have to hover just above zero through 2028, before settling below 1%. Kavcic says an earlier population boom—nearly 1.3 million people added in a single year—caused a "significant weakening" in the rental market, among other issues. The new figures show population declines almost everywhere in Canada, with only Alberta and Nunavut bucking the trend, each inching up 0.2%.