Canada's population is dropping, but economists say that could be OK

Canada's universe swayback by nearly 55,000 people in the number one 3 months of this year, according to new numbers from Statistics Canada, which estimates the population as of April 1 was 41,417,056.

The 0.1 per cent drop reflects a decrease in both immigration and in births compared to deaths, the agency said.

The preliminary figures for early 2026 come months after the agency reported an overall decline in the population for last year.

There were about 20 per cent fewer permanent immigrants in Canada in the first quarter of this year compared to the same time last year, dropping to 83,149 from 104,210 in 2025.

The number of non-permanent residents dropped by more than 117,000, though Statistics Canada cautioned there may be future updates to those initial estimates due to "shifting international migration policies."

As well, what the agency calls "natural increase" in population — if births outnumber deaths — was, in fact, a decrease as 155 more people died than were born across the country in the first quarter.

These population shifts are also a likely factor in recent data that shows, by some measures, Canada's economy has been struggling.

National Bank of Canada chief economist Stéfane Marion says that the population decreasing has been a part of why measures such as gross domestic product have dropped.

"When you adjust for population, the signals that we get from the Canadian economy are less dreadful," said Marion.

With fewer immigrants, the overall size of what economist Mikal Skuterud describes as the "economic pie" would shrink, even though a smaller population overall might mean a bigger per-person slice of that pie.

Skuterud, a professor of economics at the University of Waterloo, says that as population has decreased in Canada, the share per person of the gross domestic product (GDP) has gone up.

"As a result of the Liberal government's U-turn on immigration policy, GDP per-capita growth rates have turned from negative ... And now it's flat or slightly positive," he said.

Marion called the higher immigration growth in 2022 and 2023 "unsustainable," and Statistics Canada wrote the drop in permanent immigrants in early 2026 matches the federal government's lower target for immigration.

The trick for future economic growth could be more complicated than just adding more immigrants in the future, say both economists.

"To grow the overall size of the economic pie … all of us need to contribute, or at least some of us need to contribute more to the pie," said Skuterud.

Both Marion and Skuterud pointed to plunging numbers of foreign students as a factor as well, with the latter saying that many of those students worked low-wage jobs and weren't contributing significantly to Canada's GDP.

As international students drop in numbers, their impact on Canada's economy and population will also do the same.

Marion says ongoing global uncertainty and a lack of clarity on how easily the U.S. Market can be accessed means Canada's economy isn't "operating on all cylinders" right now.

"Business investment is quite weak to negative at this point in time. And traditionally, to absorb immigration, you need business investment to be positive because that's how you create jobs."

Ontario and British Columbia saw a bigger drop in temporary residents compared with permanent immigrants, when compared with other provinces, especially Alberta.

"Alberta is still growing … there are no other large provinces that continue to show population expansion," said Marion.

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A portion of that increase was due to Canadians moving there from another province. Alberta also saw more people born than die, bucking the national average.

Marion also pointed out that temporary workers and students were part of the overall drop in B.C. And Ontario, because while both provinces saw newcomers, they saw fewer permanent immigrants move there than the number of temporary foreign workers and students leaving.

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