Fewer temporary residents will sharply slow population growth in Canada

Canada’s population growth will slow dramatically to an average of 0.8% annually from 2025 to 2027 after surging by 3% annually in 2024 and 2023. The sharp deceleration reflects the federal government’s new target to reduce temporary residents’ share of the population to 5% by 2027.

What you will learn:

• We project the population will reach 42.2mn in 2027, around 1mn less than our previous forecast. A slower-growing population will temper the previously anticipated boost to the labour supply and potential output in the near term. It will also lessen, but not eliminate, the strains on housing, education, health care, and other public infrastructure.
• Based on recent trends, we estimate the total number of temporary residents will hit 2.9mn in mid-2024. This represents about 7% of the population, so will need to be cut by around 800,000 to reach the government’s 5% target by 2027. We assume the federal government will lift the official targets laid out in its current Immigration Levels Plan and offer 300,000 individuals permanent residency over the next three years, which means the remaining 500,000 temporary residents will depart Canada by 2027.
• Growing opposition to high migration levels could make raising immigration targets difficult, especially in the run-up to the 2025 federal election. The government could also face logistical and legal challenges in reducing the number of temporary residents. Our key risk scenario assumes temporary residents are reduced at a more gradual pace and over a longer period, reaching the 5% target by 2030. As a result, the population tracks higher than our baseline in the short term.