With Canada's population growth now essentially flat, the country could be heading toward an unprecedented situation where population growth is driven entirely by immigration, one expert says.
Based on the federal government's latest Immigration Levels Plan, the parliamentary budget officer projects 2026 will be Canada's second consecutive year of zero population growth.
Canada saw rapid population growth as it emerged from the COVID-19 pandemic. That growth, which was driven almost entirely by immigration, peaked at 3.1 per cent in 2023 — high above the historic average of 1.1 per cent going back to 1972.
Statistics Canada data shows the population grew by 816,000 temporary and permanent immigrants in 2024, while natural population growth — births over deaths — came to roughly 34,000 people.
Dan Hiebert, a University of British Columbia geography professor who studies human migration, said Canada is facing a "unprecedented" future of population growth set by government policy.
"Natural increase in Canada is going to hit zero really soon. Maybe 2029, maybe 2030, give or take, right? And at that point, all population growth is going to be immigration-related, like 100 per cent," he said.
"It means that wherever the government of Canada, and in particular (Immigration, Refugees and Citizenship Canada), wherever it sets that immigration number at, that's the amount the population is going to grow. So that's historically unprecedented."
A 2024 government report on the future of Canada's immigration system says newcomers are expected to account for all of the country's population growth by 2032.
Immigration has long been a driver of Canada's population growth and has been consistently the top contributor to growth since the beginning of the millennium. About 148,000 immigrants arrived in 2000, while natural growth that year came to about 110,000 people.
The gap between natural population increases and growth due to immigration has only widened over the past 25 years.
The stated goal of the latest government levels plan is to reduce the number of people coming to Canada — especially temporary immigrants, including students — to ease pressure on the housing market and other areas strained by rapid population growth.
Rachel Battaglia, a Royal Bank of Canada economist, said the bank forecasts rents will continue softening this year after the rapid increases in the years immediately following the pandemic.
Rentals.ca, a site that tracks average rental rates across Canada, says that while the average national rent declined in February for the 16th consecutive month, the rate of that decline is slowing.
Battaglia said the effect of slower population growth on the housing market is double-edged — reduced demand can lead to lower housing costs while also weakening the market incentive to build more units.
"Fewer inflows of newcomers means reduced demand for housing, especially in markets like the GTA, where a large share of Canada's international migrants do tend to settle upon arrival. Even with lower rates and price cuts, affordability is still in a very different state relative to pre-pandemic," Battaglia said.
While RBC is projecting a softening housing market across the country, Battaglia said affordability challenges are compounded by recent declines in consumer confidence and a slow labour market.
The number of younger immigrants coming to Canada after the pandemic had a measurable effect on demographics. Canada's median age saw slight reductions from 2022 to 2024, dropping from 41 years to 40.3 years.
Last year saw the first median age increase in three years — up to 40.6 years — due to a shrinking non-permanent resident population.
"So now that inflow of newcomers, who again are younger on average than the Canadian-born population, now that inflow is slowing we've seen that trend revert, which means we can't rely on new workers to address our labour market challenges as heavily we did in recent years," Battaglia said.
"It's something that won't be as available to us moving forward instead. I think we're going to have to focus more so on increasing the participation rate among the existing population and improving productivity."
Hiebert said, thanks to the combination of a declining birthrate and longer life expectancies, he expects Canada's "old age dependency ratio" to grow. That ratio refers to the number of people above retirement age compared to the working age population, usually described as people aged 18 to 64.
"The higher that ratio, the tougher it's going to be to have the economy function properly. And also, especially, to have government function properly," Hiebert said.
"Once people retire, they still draw on social services. And in fact, the draw on social services actually becomes higher over time simply because of the added health care costs … and at the same time they're putting in less tax revenue, because they aren't working."
Hiebert said Canada's old age dependency ratio, or OADR, is currently around 29.5 people aged 65 and older for every 100 working age people.
He has used a Statistics Canada model to project how the OADR might change under different long-term immigration scenarios.
The parliamentary budget officer's report on the Immigration Levels Plan predicts medium term population growth at 0.8 per cent annually.
Hiebert's modelling suggests this would result in an OADR of about 50 retirees for every 100 people in the working population 50 years from now.
He said with immigration now on track to become Canada's sole population driver, the government should adopt longer-term planning beyond the three-year window in the Immigration Levels Plan.
"So we're racing toward the future without actually thinking of where we're racing toward," he said. "We don't know what the finish line looks like. We just know what this little leg of the race is looking like."
Picture Courtesy: THE CANADIAN PRESS/Sean Kilpatrick
