As of early January 2026, Statistics Canada estimates Canada's population shrank by about 76,000 in the third quarter of 2025, the first quarterly drop in years. The cause is a sharp fall in non-permanent residents, mostly international students and work permit holders. Since that group mostly rents, rent growth across Toronto and the GTA has eased and rental vacancy has risen.
I am Moe Asgarian, a principal real estate broker in Toronto with RE/MAX, and population is one of the first numbers I check when I try to read where the GTA housing market is heading. This news touches housing, rents, the job market and the future of the economy, so it is worth going through carefully, including the part where the number itself may not be reliable.
Why Canada's Population Fell in the Third Quarter of 2025
The drop, about 76,000 people in the third quarter of 2025, came almost entirely from non-permanent residents: international students and people on work permits. The reason is a change in immigration policy. Ottawa started tightening in late 2024, and under the Carney government the rules are being pursued more seriously. The figures show departures of temporary residents exceeding arrivals by a record margin, largely because their temporary status simply ran out. The largest decline was among people on study visas, then work visas.
This is the biggest fall in the non-permanent resident population since 1971, and every province was affected. Ontario saw the largest decline, followed by British Columbia, Quebec and Alberta. The federal government has said it will reduce temporary resident numbers further in coming years and lower the intake caps. The stated reasons are public dissatisfaction with immigration, the housing crisis and pressure on the health care system. As of the start of 2026, it looks like policymakers are finally hearing the complaints.
How Population Decline Affects GDP Per Capita and Unemployment
When the population falls, GDP per capita rises. That is not economic growth, it is a smaller denominator. The same thing happens in the labour market: a shrinking population pulls the unemployment rate down, not because more jobs were created but because the whole labour market got smaller. Read both of those numbers with that in mind, because they will be quoted at you as good news.
Why Big Immigration Numbers Do Not Always Mean New Housing Demand
Canada is still raising the number of permanent residents it admits, but many of those new permanent residents were already living here on paper. In 2024, roughly 250,000 of the new immigrants admitted were already in Canada as students or workers, and only their status changed. So when a recent annual headline says around 400,000 people were admitted in a year, that is not 400,000 new people on the street, and it is not 400,000 new households looking for housing. Real population growth has been much smaller than the headlines suggest, and that is the answer to the question of how Canada can admit around 400,000 people in a year and still see growth slow down the way it did in 2025.
What This Does to Rents in Toronto and the GTA
This is why rent growth had been easing in the months leading up to January 2026. The non-permanent resident population grew quickly for several years and was shrinking as of early 2026, and most people in that group rent rather than own. Official reports show that markets with a heavy student concentration saw the largest increase in vacancy. If you own a rental unit in the GTA, that is the pressure you are feeling, and it is coming from national population flows rather than from anything happening on your street.
Canada Has Drifted Away From Selecting for Skill
There is a real medium and long term problem underneath all of this. If Canada cannot bring in workers and skilled immigrants, it runs into economic trouble, and we are watching signs of exactly that in some European countries right now. The answer is not to shut immigration down, and it is not to admit large numbers of people without particular skills either. It is to use the capacity of skilled and specialist workers, which takes planning and a long term commitment to a direction. In recent years Canada has gone the opposite way and drifted away from the goal of attracting the best and most talented into permanent residence.
Under the points system that existed in Canada from the 1960s and 1970s, applicants for permanent residence were assessed on education, work history and language skills, and the highest scorers were accepted. There was no political interference, so top talent kept arriving, which was good for the Canadian economy. In 2023 the immigration minister was given discretion to set priorities for certain immigrant groups and move them to the front of the queue. That approach has created dissatisfaction and, in practice, reduced even the healthy flow of applicants that existed before. The system's own shortcomings add to it: there are many files from well qualified applicants who have been waiting for years, and once COVID ended the return to the office, IRCC lost what little productivity it had.
There is also an opening right now. Across the southern border, new rules have made getting a green card, permanent residence or citizenship effectively impossible for people from around thirty countries. That includes many Iranians currently working in the United States, with higher education and jobs at large companies and very good incomes, who cannot obtain a green card under the new rule. Canada has the chance to attract that talent and make the best use of it. What has been in place instead is an opaque system with political lobbying inside it, closer to a lottery than a competition, where skilled workers were no longer first in line for Canadian permanent residence. Provincial programs made it more complicated again, bringing their own priorities and pushing merit further into the background.
How Solid Is the Q3 2025 Figure of 76,000?
The last point I want to make is that there is genuine doubt about whether that decline of 76,000 in the third quarter of 2025 is real. Statistics Canada estimates the number of people on temporary visas who leave the country. In Canada we do not actually know how many of the immigrant population exit, and nobody knows the true figure. So the agency's estimates of the temporary resident population can be wrong, and they can be revised significantly later. In 2019 Statistics Canada concluded that the 2011 census had undercounted the temporary resident population. Earlier in 2025 its own estimates of temporary residents in previous quarters were revised substantially upward.
Population and immigration are among the main inputs I use when I study the housing market in Canada and the GTA, which is exactly why I want the number to be solid before leaning on it. If you want to talk about what these population shifts mean for a property you own or a purchase you are planning, fill out the form at the bottom of this page or book a free consultation. Stay well and take care.
Frequently asked questions
How much did Canada's population fall in 2025?
Statistics Canada estimated a decline of about 76,000 people in the third quarter of 2025, the first quarterly drop in years. It was driven by non-permanent residents, mainly international students and work permit holders, leaving as their temporary status expired.
Which provinces lost the most non-permanent residents?
Ontario saw the biggest decline, followed by British Columbia, Quebec and Alberta. Every province was affected. Across Canada it was the largest fall in the non-permanent resident population recorded since 1971.
Does lower immigration mean Toronto rents will keep falling?
Rent growth across Toronto and the GTA had been easing in the months up to January 2026 as the non-permanent resident population shrank, and official reports show markets with heavy student concentrations saw the largest rise in vacancy. The federal government has said it will lower temporary resident caps further in the coming years.