Canada’s population growth remained stagnant in the second quarter of 2025, as per the latest data from Statistics Canada, mirroring trends seen earlier in the year. The population of the country increased by 0.1 per cent from April 1 to July 1, adding 47,098 individuals during that period. This growth rate is the lowest for a second quarter since 1946, excluding pandemic years when record-keeping began.
The lack of growth was primarily due to a decline in the number of non-permanent residents in Canada. In this quarter, 58,719 non-permanent residents departed the country, marking the largest quarterly decrease since 1971, excluding pandemic-related impacts, according to the agency.
This decline follows changes made by the federal government in 2024 to restrict the entry of non-permanent residents into Canada. These adjustments included limiting the intake of temporary foreign workers and scaling back the issuance of study permits.
Previously, the government had eased restrictions on non-permanent residents to address labor shortages post-pandemic, resulting in a significant population surge of about 1 million people annually from 2022 through early 2025.
Statistics Canada reported a decrease in the number of individuals holding work or study permits in Canada, contributing to the drop in non-permanent residents. The influx of asylum claimants helped offset the overall decrease in temporary residents.
Economist Armine Yalnizyan, an Atkinson fellow focusing on workforce trends, noted that while the current population figures may not immediately impact the economy, they could have long-term consequences. Sectors such as construction, long-term care, child care, and food production heavily rely on foreign workers, and restrictions may lead to challenges in these industries over time.
Yalnizyan expressed skepticism about potential changes to immigration targets by the government, given the current unemployment rate, which reached 7.1 per cent in August, the highest rate outside of pandemic periods since 2016. She emphasized that demographic shifts, including an aging population, could pose challenges, underscoring the importance of attracting working-age individuals to sustain the labor force.
The average age of Canada’s population rose slightly from 41.6 to 41.8 years between April and July, with nearly one in five Canadians aged over 65 as of July 1. Yalnizyan highlighted the need for strategic immigration policies to address labor force dynamics, as newcomers have significantly contributed to labor force growth in recent years.
Labour economist Parisa Mahboubi from the C.D. Howe Institute cautioned that while immigration plays a role in offsetting aging demographics, a focus on attracting skilled individuals could have a more substantial economic impact. She suggested that enhancing productivity and supporting existing workers to increase their working hours are crucial strategies to address labor force challenges.
Investments in technology and artificial intelligence were also cited as potential solutions to boost productivity and address labor force issues in the future.
