Canada’s population saw the largest decline on record in the third quarter of 2025, with a dip of 76,068 people, according to new data from Statistics Canada.
The drop, which StatCan attributes to a decline in non-permanent residents — primarily international students — is larger than any other recorded since the agency began keeping records in 1946. While not necessarily unexpected, it could have impacts on both housing, and the country’s wider economy.
Ontario, in particular, saw its biggest drop on record, almost 67,000 people.
The country’s population was 41,575,585, as of Oct. 1, 2025, down 0.2 per cent from July 1, as per numbers posted online Wednesday.
The drop was caused, in part, by a cap on international students allowed into the country introduced by the federal government in starting in 2024, which has resulted in a decline in enrolment at Ontario colleges and universities. The November federal budget contains plans to continue to limit new international student permits with a target of 150,000 next year, down from a prior target of 305,900.
“The federal government introduced policies in 2024 to slow international migration to Canada, and we’re starting to see the impact of those in the data that we released today,” said Stacey Hallman, an analyst at the Centre for Demography at Statistics Canada.
Because Canada is “among the ultralow fertility countries” (fewer than 1.3 births per woman), the population is heavily impacted by international migration, Hallman noted.
Canada’s population dropped between the third and fourth quarters of 2020 during the COVID-19 pandemic, with a decline of 1,232 people, a blip Hallman said was due to pandemic restrictions.
In contrast, in the third quarter of 2023, during a period of federal policies aimed at attracting immigrants, the country saw its highest population growth since the second quarter of 1957, up 1 per cent, equivalent to 418,634 people.
Douglas Porter, chief economist at the Bank of Montreal, said the biggest impact of the population drop will be on housing.
“I appreciate this has been a matter of great debate. For about the last four or five years, we have come down on one side of this debate very heavily,” he said. “We have long been of the view that one of the reasons why affordability became such an issue across the country was in part due to the dramatic rise in population, especially after the pandemic.”
He added that while population growth is a “building block” of Gross Domestic Product (GDP) growth and spending, it’s not the only one. And over the short term, the bank finds “zero” correlation between population growth and economic growth.
In terms of the broader economy, Robert Hogue, assistant chief economist at RBC said he sees the population decline as “headwinds and not necessarily as tipping the overall economy into some kind of recessionary conditions.”
The bank is still expecting “slow growth overall, but positive growth.” Low interest rates and government spending in budgets “will keep the economy, the Canadian economy, including Ontario’s economy afloat,” he said.
In Wednesday’s release, Statistics Canada cites a 73,682 person drop in study permit holders and a 67,616 person drop in work and study permit holders. Over 47,000 of the study permit holders were in Ontario.
The number of asylum claimants, protected persons and related groups was up by 7,324 people in the third quarter of 2025. Permanent immigration numbers were also stable over the same time period.
The numbers are considered estimates and will be updated.
Rupa Banerjee, a professor at Toronto Metropolitan University (TMU) and Canada Research Chair of economic inclusion, employment and entrepreneurship of Canada’s immigrants, said the international student caps have had a huge impact on colleges and universities, particularly locally.
“Across the board, in the GTA you see a lot of, particularly the community college sector, basically having to shutter programs or reduce offerings because of this,” she said. This not only impacts programs that had a lot of international students, but others that drew out of the “central coffers” of funding, she added.
The changes are also having an impact on Canada’s reputation as the place for the world’s best and brightest, she added.
“Overall our position as the top destination for students looking to study abroad comes into question.”
LJ Valencia, an economist with Desjardins Group, said the drop in population, particularly in areas where there were a lot of international students, such as the Greater Toronto Area, should help ease rental housing demand.
But he said in the long term, it could also lead to slower growth.
“If there’s fewer people in general, that means that there are fewer people contributing to economic activity,” he said.
TMU’s Banerjee said the drop in population was expected. But if it continues, it could have even more of an impact, with “more broad ripple effects throughout the economy.”
