Ottawa has pulled off a tire-squealing U-turn on immigration.
What happened: Canada’s population fell by ~76,000 people in the third quarter, the largest decline in the country’s history and just the second time on record that the population has fallen in a quarter.
A record drop in international students and non-permanent residents drove the decline. Temporary residents made up 6.8% of Canada’s population as of the third quarter, down from a peak of 7.6%.
Catch-up: Coming out of the pandemic, Ottawa opened the door to millions of temporary workers and international students. In February of last year, one in 40 people in the country was an international study permit holder.
Strain on housing, healthcare, and other public services sparked a public opinion backlash to the country’s immigration policy. Per Abacus polling, nearly half of Canadians now hold negative views on immigration.
In response, the feds have committed to cutting the share of temporary residents to 5% of the overall population.
Why it matters: Newcomers have driven Canada’s GDP growth for years, but despite the recent pullback in immigration, the economic picture for Canadian households — at least in the aggregate — has actually improved.
A recent RBC report found that GDP per capita, a measure of how big the average Canadian’s slice of the economic pie is, will grow in 2025 for the first time in three years.
What’s next: GDP per capita is expected to improve at an even higher clip over the next two years, although the upcoming CUSMA negotiations could throw a wrench in that peachy forecast.—LA