According to Statistics Canada, the country grew by just 0.1% in Q2 2025 — the slowest second-quarter growth since 1946 (outside of the COVID-19 border closures). Canada’s population now sits at 41.65 million, but most of that growth came in 2024, before immigration targets were sharply reduced.
This sudden slowdown is shaking economists, policymakers, and businesses alike. Why? Because Canada’s economy, housing market, and labour force all heavily depend on immigration.
Why Did Growth Stall?
In 2024, the federal government slashed both permanent and temporary resident targets, aiming to cap temporary residents (students, foreign workers, etc.) at just 5% of the population. That means fewer newcomers entering Canada at a time when birth rates have fallen to record lows (just 1.25 children per woman in 2024).
CIBC economist Benjamin Tal summed it up:
“Canada needs immigrants like oxygen, but it was simply too much of a good thing.”
While the slowdown may ease pressure on housing and infrastructure in the short run, experts warn it could cut long-term economic growth.
Labour Market Impact: A Retirement Wave Meets Fewer Newcomers
Canada is facing a labour crunch. With 5.2 million baby boomers already retired and millions more leaving the workforce by 2030, immigration has been the country’s main tool to keep jobs filled.
RBC’s Cynthia Leach warns that by 2030, labour force participation will drop by two percentage points, hitting industries like agriculture, construction, and hospitality the hardest.
- Fishing & Agriculture: 40% of workers are over 55.
- Food & Beverage: Over 25% of employees are immigrants.
- Business Ownership: Immigrants represent 32% of entrepreneurs with paid staff.
Without enough new Canadians, businesses may need to raise wages, invest in automation, or double down on training to fill gaps.
Housing Market: Relief or Risk?
If you’ve been waiting for Toronto or Vancouver prices to cool, slower population growth may be the trigger. With fewer immigrants arriving, housing demand is softening, especially in the condo market, where sales have already collapsed by 65% this year.
- Altus Group predicts housing construction could shrink dramatically, leading to 41,000 job losses in construction-related industries.
- But for buyers? A wave of cheaper condos could hit the market as supply outpaces demand.
Detached and semi-detached homes, however, may hold firmer since supply is tighter in those categories.
The Aging Nation Problem
Canada isn’t just slowing down in growth — it’s aging. Nearly 1 in 5 Canadians is now over 65, and healthcare costs are surging. By age 90, annual care costs jump to $36,000 per person.
With fewer working-age taxpayers to support pensions and health care, the strain on public finances will intensify. Immigration was supposed to help offset this burden, but with reduced inflows, the weight shifts back onto younger Canadians already struggling with affordability.
What’s Next?
While the government expects growth to return by 2027, RBC predicts near-zero growth will last longer, keeping pressure on the economy, labour, and housing.
The bottom line:
- Businesses face hiring challenges.
- Homebuyers may finally see price relief in condos.
- Governments risk higher deficits as healthcare and pension costs soar.
Canada’s growth engine has always been immigration — and as long as it remains dialed down, the country will feel the ripple effects across every sector.
✅ Takeaway for Canadians: A slower-growing population could mean opportunities for buyers and challenges for businesses. The big question is whether Canada can balance affordability with the economic growth it desperately needs.